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India-EU FTA results in dramatic reduction in import duties on fully built European cars which are set to fall from a punishing 110 per cent to just 10 per cent
India’s landmark Free Trade Agreement with the European Union is being widely called the “Mother of all deals”, and for luxury car buyers, the excitement is fully justified. One of the headline-grabbing outcomes of the pact is the dramatic reduction in import duties on fully built European cars which are set to fall from a punishing 110 per cent to just 10 per cent under a defined quota. When the numbers are crunched, the impact on on-road prices is nothing short of staggering.
Until now, luxury cars imported into India have carried a massive tax burden. A high-end European car typically attracted 110 per cent customs duty, followed by around 40 per cent GST and cess, effectively more than doubling its base price by the time it reached showrooms. The structure is the single biggest reason why global icons like Porsche, Land Rover, Mercedes-Maybach and Rolls-Royce cost nearly twice as much in India as they do abroad.
Under the new India-EU FTA framework, that equation changes completely. With import duty slashed to 10 per cent while GST remains unchanged, the final price stack shrinks big time. Instead of Base Price + 110% duty + 40% GST, buyers now look at Base Price + 10% duty + 40% GST. That single change wipes out a huge chunk of the tax component resulting in prices that are nearly half of what buyers currently pay.
The real-world examples are jaw-dropping. A Land Rover Defender that currently retails at around Rs. 1.03 crore could drop to roughly Rs. 54 lakh. A full-size Range Rover, priced today near Rs. 2.31 crore, could come down to about Rs. 1.21 crore. Performance SUVs like the Lamborghini Urus may see prices fall from around Rs. 4.57 crore to close to Rs. 2.39 crore. Even icons like the Porsche 911 could slip from about Rs. 2 crore to nearly Rs. 1.05 crore while ultra-luxury flagships such as the Rolls-Royce Phantom could potentially be priced near Rs. 4.7 crore instead of Rs. 9 crore.
What makes this even more disruptive is that the savings run into crores, not lakhs. Models such as the Mercedes-Benz G-Wagen, McLaren GT, BMW M cars and high-end Audis stand to benefit massively, instantly expanding the pool of potential buyers in India. While the tariff cut will be phased in and capped by annual volume limits of 2,50,000 vehicles, the psychological and market impact is already enormous.
Beyond pricing, the deal reshapes India’s luxury car landscape. European brands, which currently hold a tiny share of India’s 4.4 million unit annual car market, suddenly gain a powerful incentive to expand their presence. However, it must be noted that the drop in tariffs may not directly translate to abruptive price reductions as brands control the final outcome of the sticker tags. It will be interesting to see how they choose to react!
The post India-EU FTA “Mother Of All Deals” To Slash European Car Prices By Half appeared first on Gaadiwaadi.com – Latest Car & Bike News by Surendhar M.