India is learnt to have broadly agreed to lower import duties on cars from the European Union (EU) region from the existing 60%, bringing it at par with the duties levied on cars that are assembled here under the completely knocked down route.
The EU and India have made "substantial progress" on the former's demand to cut import duties on cars in the proposed bilateral trade and investment agreement (BITA) during the 12th EU-India Summit in New Delhi on Friday, sources said.
The EU wants import duties on cars to be halved as part of the proposed BTIA aimed at giving a fillip to a more expanded trade between the two sides.Once the BITA comes into force, companies auch as BMW, Mercedes Benz, Audi, Volkswagen, Skoda, Jaguar Land Rover, Fiat, Maserati, Lamborghini, Bentley, Rolls Royce and Mini would directly benefit from the lower duties. The prices of their cars are likely to come down by as much as 20%.
However, the move is unlikely to go down well with the domestic industry as well as countries such as Japan, Korea and the US.
Despite being more prominent players in Indian market these countries do not enjoy any duty relief, as cars feature in the negative list in the bilateral trade pacts with them.
So, while a made-in-Sweden Volvo XC60 will see its price fall from Rs 41 lakh to Rs 33 lakh, its Japanese competitor Mitsubishi Montero will still cost Rs 39 lakh.