India-EU draft FTA could cut car tariffs and expand export quotas to 4 lakh units
A proposed India-EU free-trade agreement would allow 2.5 lakh Indian-made passenger vehicles into the EU at concessional duty initially, rising to 4 lakh annually by Year 10. Tariff relief would be phased across ICE, hybrid and EV segments, with separate price-based quotas.
What happened
India-EU Free Trade Agreement · The draft India-EU FTA offers Indian automakers phased tariff relief and expanding EU quotas for ICE, hybrid and electric
Key facts
- 2.5 lakh Indian-made passenger cars annually at 8% concessional duty initially
- Quota rises to 4 lakh units annually by Year 10
- ICE and hybrid car tariff falls from 8% to zero by Year 5 for vehicles priced up to €50,000
- Above-€50,000 conventional and hybrid vehicle duties reach zero by Year 10
- Sub-€40,000 EV/PHEV quota starts at 27,500 units in Year 5 and reaches 1.25 lakh from Year 14
What changed
The draft India-EU FTA offers Indian automakers phased tariff relief and expanding EU quotas for ICE, hybrid and electric passenger vehicles. It also provides quota-based concessions for selected Indian agricultural and processed-food exports.
Why this matters
Indian automakers should prepare EU-compliant production, certification and model portfolios to capture concessional-duty export quotas that could reach 400,000 vehicles annually by Year 10.
What to watch
- Final FTA text, tariff phase-down schedule and ratification timeline.
- Rules-of-origin thresholds and treatment of imported battery cells, semiconductors and drivetrain components.
- Quota allocation methodology, price caps and safeguard provisions for passenger vehicles.
- EU homologation, emissions, safety and battery-passport compliance requirements.
- Announcements from Tata Motors, Mahindra, Maruti Suzuki, Hyundai, Kia, Volkswagen Group and Stellantis on EU export programs.