After US, EU urges India to remove car import tariffs
What's the story
As part of a trade agreement, the European Union (EU) is urging the Indian government to remove high tariffs on car imports.
To this end, India is mulling a phased reduction of these tariffs from over 100% to 10%, as per Reuters.
The proposal comes despite industry lobbying to retain at least 30% tariff and defer changes in import duties on electric vehicles (EVs) by four years.
The EU's request comes weeks after the US government made a similar demand.
List
These carmakers stand to benefit
The proposed tariff cuts would benefit European carmakers such as Volkswagen, Mercedes-Benz, and BMW by giving them wider access to India's protected market. It could also benefit Tesla which plans to start selling imported EVs in India this year.
Tariff strategy
India's auto industry proposes phased tariff reductions
The Indian auto industry has proposed a reduction of tariffs on a limited number of petrol cars to 70% from over 100%, followed by phased cuts to 30%.
For EVs, carmakers are advocating no tariff cuts until 2029, followed by gradual reductions on limited imports to 30%.
This proposal is similar to India's stance in negotiations with the US.
Negotiations
EU, India in trade talks for several years
India and the EU have been in trade talks for years, and aims to finalize the agreement by 2025-end.
Recently, Antonio Costa, President of the European Council, took to social media platform X to stress that it's time to "decisively advance in negotiations with India."
His statement highlights the urgency and significance of the ongoing talks.