India-EU trade deal: Import duty on cars cut to 10% from 110%, with riders

India, at present, imposes import duty of 70-110% on cars.

Published on: Jan 27, 2026, 13:05:34 IST

By Tushar Deep Singh

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India and the European Union (EU) have signed a free trade agreement that will gradually reduce the import duty on cars to 10% with an annual quota of 2.5 lakh vehicles.

Cars made in Europe will no longer face higher, sectoral duties. (Bloomberg)

With a modest production footprint and annual sales still in tens of thousands of cars, European brands have huge room to expand after losing market share in the last decade.

The likes of Volkswagen to Renault and BMW hold less than 3% share of India's car market, according to industry data. The South Asian country's car market is dominated by Maruti Suzuki India Ltd. and homegrown brands Mahindra and Mahindra Ltd. and Tata Motors PV Ltd., which together hold two-thirds.

India has the world's third-largest car industry after the US and China, but its 4.4 million cars/year market has been one of the most protected, with current levies of 70% and 110% on imported cars.

This is a developing story. More to come.

ABOUT THE AUTHOR
Tushar Deep Singh
Tushar Deep Singh is a business journalist and digital editorial leader with 12 years of experience in financial journalism. Currently Assistant Editor at Hindustan Times, he is building the HT Business vertical and managing the newsletters for both Livemint and HT. When not in the newsroom, he can be found on a motorcycle. Throughout his career, Tushar has been instrumental in scaling digital publishing operations at some of India’s largest financial news websites. His six-year tenure at Mint—the first job—saw him plunge into online media to deliver record-breaking digital engagement for Livemint.com, including 7.2 million page views on 2017 UP Election Results day. He held fort at Livemint during a senior-level leadership transition later that year. That won him the HT Media Star Award (Bronze) in 2017 and a Certificate of Appreciation for Editorial Excellence in 2018. As the head of the digital desk at ETtech, he curated two daily, full-stack newsletters from an editorial as well as product perspective. At NDTV Profit, he transitioned from website editor to principal correspondent, reporting on the auto sector for the TV channel and website, thereby adding yet another layer to his editorial expertise. He is a post-graduate in journalism from Xavier Institute of Communications, Mumbai, and a graduate from St. Xavier's College, Ahmedabad.Read More

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