India-EU FTA Finalized: Auto Sector Sees Major Twist with Duty Cuts, Quotas

• India and the European Union have finalized a Free Trade Agreement (FTA) after 18 years of negotiations.
• India will reduce import duties on European vehicles from up to 110% to 10% over 5 years, while Europe will reduce duties on Indian cars to zero.
• The agreement includes a quota system for duty reductions, applicable to Electric Vehicles, Heavy Vehicles, and Luxury Cars.
• India will provide a quota for 2.5 lakh European vehicles, with Europe offering a quota 2.5 times larger for Indian vehicles.
• Vehicles imported under the quota must have an on-road price of at least ₹25 lakh, or an ex-showroom price of at least 15,000 Euros for European cars.

Why It Matters: The India-EU FTA introduces phased duty cuts and a quota system for the auto sector, impacting vehicle imports.