Car enthusiasts in India might soon see lower prices for luxury vehicles as the government plans a major move. Reports indicate that India is set to slash import tariffs on cars to 40 percent as part of a trade deal with the European Union. Currently, the taxes on imported vehicles are very high, ranging between 70 to 110 percent.
What are the new tax rules?
According to sources, the import duty will be reduced to 40 percent immediately for certain categories of cars. This benefit applies to high-end gasoline cars that cost more than 15,000 euros. Over time, the government aims to bring this tax down even further to just 10 percent. However, this initial relief is designed for a specific quota of vehicles and does not apply to all imports immediately.
Which cars will benefit?
The new rules will initially apply to about 200,000 combustion-engine cars per year imported from the EU’s 27 nations. This includes popular luxury brands like Mercedes-Benz, BMW, and Volkswagen. It is important to note that Electric Vehicles (EVs) are excluded from this tax cut for the first five years to ensure the domestic EV market continues to grow without immediate foreign competition.
Quick Look at Duty Changes
| Category | Current Tax | New Proposed Tax |
|---|---|---|
| Imported Cars | 70-110% | 40% (Initial) |
| Future Goal | – | 10% |
| Quota Limit | None | ~200,000 Cars/Year |
