EU Takes Cues from Trump Pressuring India to Eliminate High Car Tariffs | Carscoops

      Tariffs could initially be lowered for internal combustion engine vehicles, whereas electric vehicles may have to wait until 2029 for similar reductions.

      Eliminating high tariffs would benefit companies like VW Group, Mercedes, and BMW. India currently imposes import tariffs of up to 110% to protect its domestic industry.

      In March, Donald Trump urged India to eliminate its tariffs, which could assist Tesla.

      India might soon make imported European cars more affordable by reducing its notoriously steep import tariffs, potentially reshaping the country’s automotive market and increasing competition for local producers. The effort isn't limited to European vehicles; the U.S. is also advocating for similar reductions to gain a foothold in one of the world's fastest-growing auto markets.

      Currently, India protects its local auto sector with import duties that can reach as high as 110%. However, according to unnamed sources in communication with Reuters, officials are contemplating significant reductions for European-made cars, possibly lowering tariffs to as little as 10%. This would provide a considerable advantage to prominent German companies like BMW, Mercedes-Benz, and VW Group.

      Local brands, such as Tata Motors and Mahindra & Mahindra, are naturally opposed to these proposals. These firms have been actively lobbying against the tariff reductions, fearing a loss of the strong market position they have developed under the current protective measures.

      Reuters indicates that India's automotive sector is willing to reduce tariffs on certain gasoline-powered cars from over 100% to 70%, with further phased cuts potentially bringing tariffs down to 30%. However, distinct reductions have been suggested for electric vehicles. Sources report that Indian manufacturers prefer to wait until 2029 for tariff reductions on EVs before gradually lowering them to 30%.

      Reports suggest that India’s commerce ministry has informed local auto industry representatives about the European Union's requests for tariff cuts. Interestingly, these discussions may receive unintended support from former U.S. President Donald Trump’s trade regulations.

      Ironically, President Trump recently declared a 26% tariff on Indian exports to the United States, but in early March, he requested India “to bring tariffs down to zero or negligible in most sectors, excluding agriculture.” If India significantly reduces or eliminates tariffs on cars from the United States, it could greatly benefit Tesla as it prepares to introduce its electric vehicles in India.