India’s long wall of import duties on fully built cars may finally come down, and European brands are watching closely. Reports say New Delhi is prepared to trim tariffs on EU-made cars as part of a near-finish India–EU free trade agreement, a move that could reshape showroom pricing for premium petrol and diesel models Latest News in India.
What’s On The Table And Why It Matters
Sources cited by Reuters say India could cut duties that currently run as high as 70% to 110% down to about 40% upfront for a limited quota of internal-combustion cars priced above €15,000, with a glide path toward 10% over time. Battery EVs are reportedly kept out of the tariff cut for the first five years, reflecting Delhi’s push to protect local EV investment.
Politics are as loud as economics. The EU has chased lower auto tariffs for years, while Indian manufacturers have warned that sudden liberalisation could chill domestic manufacturing plans. The timing also fits a wider trade shuffle: both India and Europe are trying to stabilise market access amid choppier global tariffs and supply-chain geopolitics.
The Market Reaction In India
On January 27, 2026, Indian auto stocks slipped after the tariff-cut report, with investors reading the proposal as fresh competition for incumbents. Reuters shared the tariff-cut scoop on X.
What Buyers Might Actually See Next
Even if the deal lands soon, the first visible effect may be on niche, higher-priced imports rather than mass-market hatchbacks. Still, for buyers cross-shopping BMW, Mercedes-Benz, Volkswagen and other EU badges, a lower duty base can translate into meaningful sticker relief once quotas, specs and timelines are published.
