India and EU Seal Landmark Free Trade Agreement: Car Import Tariffs Slashed from 110% to 10%

India and the European Union have concluded a historic Free Trade Agreement (FTA) after nearly two decades of negotiations, announced on January 27, 2026. The deal eliminates or reduces tariffs on over 96% of EU goods exported to India, with a major focus on automobiles—India will gradually cut import duties on EU-made cars from as high as 110% to as low as 10% under an annual quota of 250,000 vehicles (primarily for cars valued over €15,000). Duties on car parts will be abolished over 5-10 years. This opens India's market to brands like Mercedes-Benz, BMW, Audi, Volkswagen, Ferrari, Rolls-Royce, and Bentley, potentially making luxury European vehicles more affordable. In return, the EU cuts tariffs on key Indian exports such as textiles, leather, gems, jewelry, and marine products. The pact is expected to double EU exports to India by 2032 and strengthen ties amid global trade shifts.