Mercedes–BMW Imported Cars to Get Cheaper in India: Import Duty Slashed From 110% to 10% Under New India–EU Free Trade Deal

In a landmark move that will reshape India’s luxury car market, the government has slashed import duty on European cars from 110% to just 10%, making premium brands like Mercedes-Benz, BMW, Audi, Porsche, and Volkswagen significantly cheaper for Indian buyers.

The reduction comes under the much-awaited India–EU Free Trade Agreement (FTA), announced today after years of negotiations.

🚗 What Changes Now?

Earlier, luxury cars imported from Europe cost nearly double due to a steep 110% import duty.

Under the new FTA:

Import duty has been cut to 10%, effective immediately.

This applies to CBU (completely built-up) cars imported from European Union nations.

Indian consumers can expect price drops ranging from ₹8 lakh to ₹40 lakh, depending on the model.

However, the government has added one control measure…

📌 Annual Limit of 2.5 Lakh Cars

To prevent an uncontrolled flood of imports that could hurt local manufacturing:

The government has capped the European imports at 2.5 lakh units per year.

Beyond this limit, regular duty structure will apply.

Industry experts say this limit is enough to meet premium segment demand without affecting Indian automakers like Tata, Mahindra, and Maruti.

🌍 Why This Deal Matters

This decision marks a major breakthrough in the India–EU Free Trade Agreement — one of the largest trade deals India has signed.

Benefits for India include:

Greater access for Indian goods in Europe

Lower tariffs on high-tech imports

Boosted bilateral trade and investment

The auto duty cut is one of the most consumer-visible outcomes of this agreement.

💬 Industry Reaction

Luxury carmakers are celebrating the move, calling it a “historic moment” that will:

Expand India’s luxury car market

Increase adoption of EVs and hybrids

Make global models more accessible to Indian consumers

On the other hand, Indian automakers may push for protection measures — especially those planning luxury EVs.

💸 How Much Cheaper Could Cars Get?

Approximate price drops expected:

Brand

Estimated Reduction

Mercedes-Benz

₹10–35 lakh

BMW

₹8–30 lakh

Audi

₹8–25 lakh

Porsche

₹20–40 lakh

Volkswagen & Skoda high-end models

₹3–10 lakh

The final price will depend on model type, engine size, and logistic charges.