How could an India-EU FTA impact India's luxury car market?

A potential India-EU FTA could lead to reduced customs duties on imported cars, stimulating demand and potentially expanding the luxury car segment in India.

What percentage of India's car market is currently luxury vehicles?

Luxury vehicles currently constitute only 1% of the overall passenger vehicle market in India.

What are the current customs duties on imported cars in India?

Imported passenger vehicles priced below USD 40,000 attract a 70% basic customs duty, while those above USD 40,000 face an effective customs duty of 110%.

Home / Business and Economy / India-EU Trade Deal: Luxury Cars Set to Roar?

India-EU Trade Deal: Luxury Cars Set to Roar?

26 Jan

•

Summary

Reduced customs duty could boost India's tiny luxury car segment.
Luxury vehicles currently form only 1% of India's car market.
An India-EU FTA aims to boost trade and innovation for both sides.

India-EU Trade Deal: Luxury Cars Set to Roar?

A potential India-EU free trade agreement (FTA) could catalyze growth in India's nascent luxury car market. Currently, luxury vehicles represent a mere 1% of the total passenger vehicle sales in India. BMW Group India's President and CEO, Hardeep Singh Brar, indicated that a reduction in customs duties on imported cars, particularly completely built units (CBUs), could enable automakers to introduce a wider range of global models and test new offerings.

The proposed FTA, which has been under negotiation for 18 years and is expected to be finalized soon, aims to foster greater trade and technological exchange between India and the European Union. Brar emphasized that such provisions would stimulate demand in the luxury segment without impacting mass-market players, presenting a genuine win-win scenario. Currently, imported passenger vehicles face customs duties of 70% to 110%, depending on their price point.