Trump Effect EU Pushes For Tariff-Free Car Access, Domestic Companies Not Happy

India-West News Desk

NEW DELHI – The Trump administration’s recent push for zero import tariffs on cars in U.S.-India trade talks appears to have rippled across the Atlantic. Now, the European Union is pressing India for the same deal, aiming to eliminate import duties on vehicles under a long-pending trade agreement, according to Reuters.

Sources told Reuters that the Modi government is considering a significant softening of its current stance and may offer to gradually reduce tariffs on imported vehicles to 10%, down from the current rate of over 100%.

This comes despite strong lobbying from Indian carmakers like Mahindra and Mahindra who want the government to retain at least a 30% tariff and keep duties on electric vehicles unchanged for the next four years to protect themselves.

India’s domestic car industry, producing about 4 million vehicles annually, is among the most shielded in the world.

Although it’s unclear whether India has formally put forward the 10% offer to the EU, experts believe both sides may become more flexible given the looming risks of a global trade slowdown and the knock-on effects of Trump-era tariff hikes, Reuters reported with India and the EU, in talks for several years, pledging to wrap up negotiations by the end of this year.

According to Reuters, India’s commerce ministry recently discussed the EU’s latest proposal in a closed-door meeting with officials from the heavy industries ministry and major auto companies. European auto giants like Volkswagen, Mercedes-Benz, and BMW stand to gain significantly if tariffs are cut, while Tesla could also benefit, with its Berlin-made EVs expected to hit the Indian market this year.