India, Sept. 16 -- European Union will allow 2.5 lakh Made-in-India cars to enter the continent annually at a concessional import duty of 8% under a bilateral free trade agreement (FTA), with the quota rising to 4 lakh vehicles. According to the draft text released by the EU, the reduced import duty will be applicable for the Made-in-India internal combustion engine (ICE) passenger vehicles and hybrid electric vehicles, which are priced up to Euro 50,000 on a CIF (cost, insurance, freight) basis.

The draft also reveals that the quota-based concessional duty will be gradually reduced to 6% in the second year of implementation of the India-EU FTA, which was announced on January 27 this year. After the second year of implementation, the imp...