India plans to slash tariffs on cars imported from the European Union to 40 per cent from as high as 110 per cent, sources said, in the biggest opening yet of the country's vast market as the two sides close in on a free trade pact that could come as early as Tuesday. ADVERTISEMENTThis will be further lowered to 10 per cent over time, they added, easing access to the Indian market for European automakers such as Volkswagen, Mercedes-Benz and BMW. New Delhi currently levies tariffs of 70 per cent and 110 per cent on imported cars, a level often criticised by executives, including Tesla chief Elon Musk. New Delhi has proposed slashing import duties to 40 per cent immediately for about 200,000 combustion-engine cars a year, one of the sources said, its most aggressive move yet to open up the sector. With the Indian market expected to grow to 6 million units a year by 2030, some companies are already lining up new investment.

Source: The Telegraph January 25, 2026 18:48 UTC