Right now, India slaps more than 100% tariffs on imported cars. So when a Volkswagen or a Mercedes hits the port, its price basically doubles by the time it reaches the showroom. The European Union wants the 100% tariffs to become 0%.
India and the EU are trying to strike a Free Trade Agreement—a deal that basically makes importing and exporting stuff between the two easier and cheaper. As part of that, the EU wants India to lower its import duties on fancy rides and fancy drinks.
The EU says India’s market is “relatively closed,” and they want in. For Gen Z, this could mean better options in the car market and maybe someday, affording that dream car.
But not everyone is vibing with this.
Indian carmakers like Tata, Mahindra, and Maruti Suzuki are not thrilled. If European cars get cheaper, people might skip homegrown options. And that could affect jobs, local businesses, and our own auto industry’s growth.
So now, the Indian government has a decision to make:
A) Protect local players
OR
B) Give consumers more variety and better prices
Spoiler: there’s no easy answer.
The US plays a wildcard entry…
As if things weren’t dramatic enough, the U.S. recently imposed a bunch of new tariffs, including the ones on India and the EU. This global trade tension is making countries speed up the trade talks and rush into new deals, like this EU-India one.
Why does the EU care so much?
Well, India is one of the fastest-growing car markets in the world. More people are moving up the income ladder and dreaming of buying premium vehicles. The EU wants a piece of that action. European automobile companies are ready to flood the Indian market, but they’re being blocked by India’s steep duties.
Why should you care?
If you’ve ever dreamed of owning a German car (and not just renting it for wedding baraats), this could actually impact you in the next few years. If this deal goes through, European cars could finally become more affordable in India. Sure, we’re not saying a Porsche will go for the price of a Swift, but the luxury gap might shrink. And that opens doors for better design, safer tech, and maybe even more job opportunities if car companies set up local assembly units.
Stay tuned, because this negotiation could change the car game in India, for good.
