The proposed deal is expected to lower peak import tariffs on EU-made cars to 40% from the current maximum of 110%, marking a substantial opening of India's heavily protected automobile market. Over time, duties on these cars could be further reduced to as low as 10%. This move would represent a major concession as trade negotiations between India and the EU approach their conclusion. Any meaningful reduction is therefore expected to have wide-ranging implications for the auto industry, bilateral trade flows, and future investment between India and the EU. The development coincides with a four-day visit to India by European Commission President Ursula von der Leyen, aimed at advancing a broader reset in India-EU relations.

Source: dna January 26, 2026 08:13 UTC