EU offers India 'zero' tariffs on cars - But New Delhi wants gradual reductions to protect domestic manufacturers
The European Union wants India to eliminate tariffs on car imports under a long-delayed trade deal, and Prime Minister Narendra Modi's government is also ready to ease its current proposal to close the talks.
India is open to gradually reducing tariffs to 10% from more than 100%, two industry sources and a government official said. This comes despite industry lobbying for India to maintain at least a 30% tariff even if it starts to cut the tax, and also not to interfere with import duties on electric vehicles for another four years to protect domestic manufacturers.
The EU's demands come weeks after US President Donald Trump's administration sought a similar elimination of import duties on cars, including electric ones, as part of bilateral trade talks with India, piling pressure on domestic carmakers.
India's commerce ministry conveyed the EU's demands and India's position to officials from the ministry of heavy industry and representatives of the automobile industry in a meeting last week, the three sources said.
The European Commission declined to comment on specifics, but shared details of the last round of talks with India in March.
"For many key areas, the EU and India have different approaches and objectives. This translates, in some cases, into different levels of ambition," a commission spokesperson for trade said in a statement.
India's commerce ministry and the Society of Indian Automobile Manufacturers, which represents major carmakers in the world's third-largest car market, did not respond to requests for comment.
India's 4 million-unit-a-year car market is one of the most protected in the world, and domestic carmakers have argued that sharp tariff cuts would wipe out investment in domestic production by making imports cheaper.
Companies such as Tata Motors and Mahindra & Mahindra have lobbied particularly against lowering import tariffs on electric vehicles, saying it would hurt a sector in which they have invested heavily and from which they plan to make more money.
India's auto industry has proposed an immediate cut in tariffs on a limited number of petrol cars to 70% from more than 100% and then making cuts in phases to 30%. For electric cars, carmakers want no tariff cuts until 2029, followed by a gradual reduction in imports limited to 30%, the sources said.
While it is not clear whether India has already made its 10% tariff offer to the EU, analysts expect both sides to be more flexible in negotiations, given the threat of a global trade war and the recessionary impact of Trump's tariff hike.
India and the EU have been in trade talks for several years and in February agreed to close the deal by the end of the year, while aiming to mitigate the impact of tariffs.
Poll
Dairy "bears the burden of prices"/ Inflation rises to 2.1% in March. Entertainment continues to cost more
Inflation in the country for the month of March has reached a value of 2.1%, from 1.9% recorded in the second month of the current year. Meanwhile, the......
"EU must buy $350 billion in US energy" - Trump sets conditions to ease tariffs on bloc
The European Union will have to buy $350 billion in US energy to ease sweeping tariffs, US President Donald Trump said, rejecting Brussels' offer of......
Impact of Trump's trade tariffs on Albania/ Rama: "We have no concerns regarding that topic"
Prime Minister Edi Rama, during the joint conference with the High Representative for Foreign Affairs and Security Policy of the European Union, Kaja Kallas,......
Development of the Tirana Circus area – The winning studio is selected (PHOTOS)
The French architectural studio L'AUC was announced the winner for its vision for the development of the central area of Tirana, known to citizens as the......
How much do you prefer internet, phone and TV packages? - AKEP: Families paying for integrated services are increasing
More Albanians are choosing to pay for an integrated package with internet, telephone and television. According to the latest data from the Electronic and......
Total procured limit fund, 16.5% of GDP - Last year it reached 402.3 trillion lek. Tenders for goods dominate
Last year, the total limit fund procured accounted for 16.5% of the Gross Domestic Product (GDP), or a value of 402.3 trillion lekë. Referring to the annual......
"US, 45% chance of heading into recession" Goldman Sachs predicts Fed rate cuts to boost economy
Goldman Sachs economists raised the possibility of a recession and predicted that the US Federal Reserve could cut interest rates more quickly following the......
Foreign exchange reserves expanded by 421 million euros - BoA: The exchange rate had a positive impact in 2024. About 64% of it was in euros
During the past year, Albania's foreign exchange reserves reached 6.2 billion euros. In 2024, it turns out that they have increased by 421 million euros......
