Скачать или смотреть Tariff Reduced on EU Cars, But Prices Will Not Drop in India – Here’s Why | India-EU FTA Meeting

The latest EU–India Free Trade Agreement (FTA) meeting has once again brought global attention to the evolving trade relationship between India and the European Union. After years of negotiations, both sides are pushing for faster progress to boost bilateral trade, investment, and market access. The key highlight of this meeting is the reduction of tariffs on several Indian and European products, aimed at making goods cheaper, improving exports, and strengthening economic ties. However, one particular decision has triggered intense debate — the import duty cut on Completely Built Units (CBU) cars from 110% to 40%, while Completely Knocked Down (CKD) cars remain taxed between 15% to 35%, even though they are already assembled in India.

This raises an important question: Will this tariff cut actually reduce car prices in India? The short answer is — not much. Since the tariff reduction applies mainly to fully imported luxury cars (CBU), the benefit will largely help European car manufacturers, not Indian consumers. CKD cars, which are partially assembled in India and already enjoy lower tariffs, do not see any new relief. This means mass-market vehicles and locally assembled premium cars are unlikely to become cheaper. In fact, the move may discourage local manufacturing if companies find it easier to import fully built cars instead of assembling them in India.

On the broader front, the FTA meeting also discussed tariff reductions on Indian exports such as textiles, garments, leather goods, pharmaceuticals, engineering products, and agricultural items, giving Indian manufacturers better access to European markets. In return, India has agreed to reduce duties on EU products like automobiles, wine and spirits, medical devices, machinery, and high-end technology equipment. This balance is crucial because the EU is one of India’s largest trading partners, with trade volumes crossing €120 billion annually.

Supporters of the agreement argue that the deal will attract investment, improve supply chains, and generate employment in both regions. Critics, however, warn that selective tariff cuts — especially on CBU cars — may benefit foreign brands more than Indian industries. The absence of relief on CKD vehicles highlights a missed opportunity to strengthen Make in India and local value addition. For Indian consumers expecting cheaper cars, the reality is clear: headline tariff cuts do not always translate into lower prices on the road.

As negotiations continue, the real test of the EU–India FTA will be whether it creates a fair, balanced, and future-ready trade partnership, or becomes another deal where benefits remain uneven. One thing is certain — the outcome of these talks will shape India’s trade, manufacturing, and consumer markets for years to come.


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