New Delhi, Jan. 31 -- Under the India-EU Free Trade Agreement (FTA), India plans to sharply cut import duties on cars made in the European Union (EU), from the current 110% to 10%, within an annual quota of 250,000 vehicles.

For EU-built cars priced above €15,000 ( Rs.16.40 lakh), tariffs are expected to ease in stages, starting at around 30-35% when the pact takes effect, likely by the end of 2026. This will further fall to 10% over the next five years, depending on the segment. This could gradually open up India's luxury car market.

Lower tariffs make it easier and cheaper for global brands to import premium and niche models. That said, luxury vehicles still account for only a very small share of the overall market. In 2025, lux...