EU Urges India to Eliminate Car Import Tariffs

The European Union is pressing India to remove tariffs on car imports as part of ongoing trade negotiations, aiming to finalize a long-pending deal. India has shown willingness to reduce these tariffs gradually from over 100% to 10%, despite resistance from its domestic automotive industry.

Domestic Industry Calls for Protection

Local manufacturers, including Tata Motors and Mahindra & Mahindra, are advocating for maintained tariffs, especially on electric vehicles (EVs), to safeguard their investments and the burgeoning EV sector. They propose a phased reduction to 30% for petrol cars and a delay in EV tariff cuts until 2029.

Potential Winners and Global Implications

A reduction in tariffs could significantly benefit European carmakers like Volkswagen, Mercedes-Benz, and BMW, as well as Tesla, which plans to enter the Indian market. The negotiations highlight the delicate balance between fostering international trade and protecting domestic industries amidst global trade tensions.