EU and India to sign trade deal cutting tariffs on cars

India is lowering import tariffs on European cars from up to 110% to 40% for internal combustion vehicles over 15,000 euros. In perspective, a reduction to 10%. The free trade agreement is regarded as the 'mother of all deals' with massive tariff reductions. European volume and premium manufacturers (VW, Mercedes, BMW, Renault) gain direct access to the world's 3rd largest market with a current EU market share of <4%. Electric vehicles are exempt for 5 years to protect local industry (Tata Motors, Mahindra). Planned: approx. 200,000 internal combustion vehicles/year. The Indian market is forecast to grow to 6 million units by 2030.

Signing expected for Tuesday (27 January 2026). Excludes Indian e-car manufacturers from tariff reductions for 5 years. Tesla remains confronted with high tariffs. The Volkswagen Group (Skoda) and Renault are planning a strategic return. The agreement makes it possible to price portfolios attractively without immediate billion-euro investments.