Key highlights
- Import duty in India to be reduced on European cars
- Rates to reduce 40% from 110%
- EVs will be excluded from the tax reduction
The import duty in India on cars is 110%, which makes the imported cars from regions like Europe cost nearly three times as much. However, this is soon going to change as the Indian government has agreed to reduce the import tax. Read all the details below.
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Import duty in India to reduce on European cars soon
The India-EU FTA or Fair Trade Deal is soon going to become a reality. As per a recent media report, the Indian government has agreed to reduce the import tax on European cars to 40%, which currently stands at 110%.
As per the report, the tax reduction will be on a limited number of cars that are imported from Europe. The tax reduction is likely to be offered on 200,000 cars that have an import price tag of 15,000 Euros or more. Furthermore, this tax could be reduced to 10% in the future.
While the reduction in the import tax sounds like a good deal, it will only benefit a limited number of cars that are sold as CBU in India. These include models like the Volkswagen Golf GTI or the Skoda Octavia vRS.
Additionally, the electric cars will not benefit from the tax reduction for the first five years. This has been done to save the domestic car manufacturers.
