Wednesday, April 09, 2025
By Kamal Swami
EU Expects Indian Government To Cut-Off High Import Tariffs
With a highly awaited trade agreement between the European Union and India, EU is expecting Indian government to cut-off high import tariffs on cars. According to sources Prime Minister Narendra Modi's government also seems in mood to revising its current proposal to move the negotiations forward. It is reported that the government of India is also considering to introduce reduction from over 100% to 10% in multiple phases. This potential move comes despite continued lobbying by domestic carmakers to retain at least a 30% duty and delay any changes to electric vehicle (EV) tariffs for at least four more years.
The proposal from EU is similar to demands from the United States, where former President Donald Trump's administration had also pressured India to eliminate auto import duties as part of bilateral trade discussions. The latest developments place mounting pressure on Indian automakers to adapt to a potentially more open market. If the Indian government agrees to reduce tariffs on cars, it would mean a big victory for European automotive giants such as Volkswagen, Mercedes-Benz, and BMW, opening gates for them to explore their business in one of the world’s fastest-growing car markets. It could also benefit Tesla, which is expected to launch imported EVs in India later this year, potentially from its Berlin plant.
According to one the sources related with the ongoing talks “EU has come back asking for a better deal and India wants to make a better offer,”. The discussions were conveyed during a meeting last week between India’s commerce ministry, officials from the heavy industries ministry, and representatives of the domestic auto industry. In a statement, European Commission spokesperson for trade Olof Gill said, “For many of the key areas, the EU and India have different approaches, objectives This translates, in some cases, into different levels of ambition.” The Commission declined to comment on the specifics of the ongoing talks.India’s commerce ministry and the Society of Indian Automobile Manufacturers (SIAM) have not yet responded to media inquiries.
It remains unclear whether India has formally presented its 10% tariff reduction proposal to the EU. However, analysts believe both parties may show greater flexibility, especially amid concerns over a potential global trade slowdown and the ripple effects of U.S. tariff policies.
