January 26, 2026
Informed sources said that India is moving towards a significant reduction in customs duties imposed on cars imported from European Union countries, to reach 40% instead of the current rate of 110%. This is considered the largest step yet towards opening up the huge Indian market, with a strong possibility of concluding a free trade agreement between the two parties next Tuesday.
Two sources familiar with the negotiations told Reuters that Prime Minister Narendra Modi’s government had approved an immediate reduction in duties on a limited number of cars imported from European Union countries whose import price exceeds 15 thousand euros ($17.7 thousand).
The two sources explained that these fees, imposed on the 27 European Union countries, will be gradually reduced to 10% over time, which will make it easier for major European car manufacturers, such as Volkswagen, Mercedes-Benz, and BMW, to access the Indian market.
