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India May Cut Car Import Duty to 10% Under EU Deal, Auto Sector Reacts

Synopsis:

India is considering reducing car import duties from 100% to 10% under an EU trade deal. Domestic players prefer a 30% rate. The move could affect Tata Motors share price and Mahindra & Mahindra share price as global brands gain access.


India is reportedly open to slashing car import duties from the current rate of over 100% to as low as 10%, in a phased manner, as part of its long-pending trade agreement with the European Union. The proposed move could dramatically alter the landscape of India’s automotive market, which currently sees high protectionist tariffs. The government’s revised position aims to accelerate negotiations and finalise the agreement by 2025, as both regions seek enhanced trade relations amid global economic shifts.

The proposed reduction has raised concerns among Indian automakers, who argue that such a drastic cut could adversely affect domestic investments. They prefer a reduced rate of around 30%, phased over time, and want electric vehicle duties left untouched until 2029.

Also read: Titan Reports Strong Q4 Growth with 22% Rise in CaratLane Sales

TATA MOTORS LIMITED

Trade

644.25-21.34 (-3.20 %)

Updated - 30 April 2025
667.00day high
DAY HIGH
641.10day low
DAY LOW
19485917
VOLUME (BSE)

Key Takeaways

  1. India may cut car import tariffs from 100% to 10% under EU deal.

  2. Local automakers want duties capped at 30%, phased over time.

  3. Electric vehicle tariffs may remain unchanged until 2029.

  4. EU brands like BMW, Mercedes-Benz, and Volkswagen could benefit.

  5. Tesla, planning to enter India, could leverage Berlin factory exports.

  6. Auto stocks, including Tata Motors share price and Mahindra & Mahindra share price, may react based on policy outcomes.

Also read: India Hikes Excise Duty on Petrol, Diesel by ₹2; Prices Stay Flat

Proposed Import Duty Revisions

Vehicle Type

Current Import Duty

Proposed EU Deal Duty

Domestic Preference

Petrol/Diesel Cars

Over 100%

10% (phased)

30% (phased)

Electric Vehicles (EVs)

Over 100%

Possible delay in cuts

Unchanged till 2029

Impact On Domestic Automakers And Global Brands

A significant duty reduction could give European automakers such as BMW, Volkswagen, and Mercedes-Benz easier market entry into India, offering more competitive pricing. Tesla, too, may benefit from exporting models via its Berlin facility. However, Indian companies including Tata Motors and Mahindra & Mahindra are concerned about potential threats to local market share and profitability.

The stock market is expected to closely monitor these developments. If the government pushes forward with the 10% duty proposal, the Tata Motors share price and Mahindra & Mahindra share price could experience volatility due to increased competition. Investors are likely to assess how policy changes may impact the long-term growth of home-grown brands amid rising global competition. The ongoing discussions may significantly shape the future of India’s automotive trade and manufacturing priorities.

Also read: BEL Wins ₹2,210 Crore IAF EW Suite Order, Boosting Indigenous Defence

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This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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