Industry Odisha Bureau,Sep 11: European automakers gain phased tariff cuts under the India-EU FTA. The quota starts at 1 lakh cars annually. It climbs to 1.6 lakh from Year 10, alongside delayed EV concessions.
India’s free trade agreement with the European Union reshapes automotive market access. European automakers will get a tariff-rate quota. It starts at 1 lakh passenger vehicles annually. The ceiling rises steadily, reaching 1.6 lakh cars from Year 10. This is not unrestricted liberalisation. India has built in price thresholds, phased cuts and separate vehicle categories.
India-EU FTA Car Tariffs: Price Thresholds Matter
The tariff-rate quota covers EU-origin ICE and hybrid vehicles. Concessions depend entirely on CIF value. Cars priced below €15,000 (around ₹16.6 lakh) get nothing. For cars between €15,000 and €35,000, duty falls from 110 per cent. It drops to 35 per cent in Year 1. By Year 5, it reaches 10 per cent. Cars above €35,000 see the MFN rate of 66 per cent fall to 30 per cent initially, later settling at 10 per cent. From Year 5, 43,000 units are reserved for cars above €50,000.
Quota Climbs To 1.6 Lakh European Cars
The ICE-hybrid quota grows yearly. It moves from 1 lakh to 1.075 lakh, then 1.15 lakh, 1.225 lakh and 1.3 lakh by Year 5. It eventually hits 1.6 lakh from Year 10. Cars exceeding the quota aren’t blocked. They simply face higher, gradually falling out-of-quota tariffs.
CKD Cars Get A Separate Tariff Quota
India has offered a distinct quota for CKD vehicles, assembled locally from imported parts. It begins at 75,000 units annually. It falls to 50,000 from Year 10. In-quota duty drops from 13.75 per cent to 8.25 per cent by Year 3, against today’s 16.5 per cent.
EV Tariff Cuts Begin Only From Year 5
Electric vehicle concessions arrive later. They start in Year 5, covering EVs, plug-in hybrids and other technologies priced above €20,000. The EV quota opens at 20,000 units, reaching 50,000 by Year 10 and 90,000 from Year 14. Tariffs fall from 30 per cent to 10 per cent over that period.
Quota Far Exceeds Current EU Car Imports
India imported just 17,191 EU cars in 2025. GTRI founder Ajay Srivastava noted the first-year quota is nearly six times that figure. He added the EU follows the UK in securing such concessions, suggesting Japan and South Korea may seek similar terms.
Wider FTA Covers Wine And Agriculture
The pact also offers tariff-rate quotas on wine, pork, apples, kiwifruit, pears and peaches, using comparable price and quantity conditions.
Controlled Opening, Not A Free-For-All
The India-EU FTA opens meaningful automotive access. It stops short of removing India’s tariff wall. Lower duties, staggered quotas and price bands define this liberalisation. The agreement may be signed by year-end and take effect next year.
