EU pressure on India to lower car import tariffs through a delayed trade deal intensifies after the US administration of Donald Trump made a similar request. The government of Prime Minister Narendra Modi shows willingness to decrease tariffs to 10% starting from the current 100%+,
The Indian car manufacturers Tata Motors and Mahindra & Mahindra along with other local companies oppose the duty reduction especially for electric vehicles because they want the government to keep current duties until 2029 to support the developing domestic EV sector. The domestic industry fears that premature tariff reductions will damage investment in the country while making imported products more competitive which could slow down India’s automotive production development.
The approval of this move would provide Volkswagen, BMW and Mercedes-Benz with market benefits while allowing Tesla to sell Berlin-made EVs in India. The negotiations between India and the EU regarding trade have extended for multiple years until both parties decided to complete the agreement before this year ends.
The 4-million-unit auto market of India functions as a significant barrier to foreign investment because stakeholders cannot agree on how to balance international business opportunities with national industry protection. The negotiations between international trade requirements and domestic business interests remain active while the conflict between them intensifies.
