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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.
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.
