India-EU Trade Deal, Could Make Luxury Cars More Affordable in India

India-EU Trade Deal, Could Make Luxury Cars More Affordable in India

The India-EU trade deal could change the future of luxury cars in India. With import duties on European-built vehicles likely to be reduced soon, many premium and performance models may finally become more affordable.

At present, imported cars attract very high taxes, which push their prices beyond the reach of many buyers. Under the new agreement, import duty may fall from the current 70-110% range to around 40%in the first phase.

This move could allow nearly 2 lakh imported cars every year to benefit from lower duties. While electric vehicles will not get any benefit in the first five years, petrol and diesel cars imported from Europe are set to gain the most.

Let’s break down how the India-EU trade deal car policy could reshape the luxury car market in India.

How the India–EU Trade Deal Cars Policy Will Cut Import Duties Sharply

One of the biggest changes under the India-EU trade deal car framework is the sharp cut in import duties. This is expected to bring immediate relief to buyers of imported luxury cars.

Right now, most European cars come to India as completely built units and attract heavy taxation. This makes even entry-level luxury cars very expensive.

If the duty is reduced to 40%, and later to 10%, brands may finally pass on the benefit to customers. This can lead to:

  • Lower ex-showroom prices
  • Better price competition
  • More imported models in India

For years, high import duty has limited the growth of the premium car market. This policy could finally unlock that potential.

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Top Luxury Brands in India–EU Trade Deal Cars Likely to Get Cheaper

Several top European brands are expected to benefit directly from the India-EU trade deal car policy.

Mercedes-Benz

Mercedes imports many of its flagship models from Europe. Likely beneficiaries include:

  • AMG G63
  • AMG S 63 E Performance
  • Maybach S-Class

These models currently sit in the ultra-luxury segment. Lower duties could bring meaningful price cuts and boost demand.

BMW

BMW’s performance and niche models are also expected to gain:

  • BMW M Series (M3, M5 and others)
  • BMW XM SUV
  • BMW Z4 Roadster

Lower prices could make BMW’s performance cars more attractive to young buyers and enthusiasts.

Audi

Audi’s flagship SUVs are also on the list:

  • Audi Q8
  • Audi RS Q8

With better pricing, Audi could strengthen its position in the luxury SUV space.

Porsche

Porsche imports most of its core models into India:

  • Porsche 911
  • Porsche Panamera
  • Porsche Macan (ICE)
  • Porsche Cayenne (ICE)

These cars form the backbone of Porsche’s India business. Lower duties could help expand sales and visibility.

High-Performance Models in India–EU Trade Deal Cars Buyers Should Watch

The India-EU trade deal cars will be strongest in the performance segment.

Performance models that may see price drops include:

  • Mercedes AMG G63 and AMG S 63
  • BMW M3, M5 and other M cars
  • Audi RS Q8
  • Porsche 911 and Panamera

These cars are popular among driving lovers, but high prices limit their reach. A reduction in import duty could bring more buyers into this segment.

This may also encourage brands to introduce more sports and performance models in India.

What the India-EU Trade Deal Cars Mean for Indian Buyers in 2026

For Indian buyers, this trade deal could be a turning point.

Lower import duties can lead to:

  • More affordable luxury cars
  • Wider choice of imported models
  • Better resale value in the long term
  • Stronger competition among brands

However, the final benefit will depend on how brands pass on the duty cut and how the 2 lakh car quota is distributed.

Buyers planning to purchase an imported luxury car in the next one or two years may want to wait and track how this policy unfolds.

Conclusion

The India-EU trade deal car policy has the potential to reshape the Indian luxury car market. If implemented well, it could finally bring global performance and luxury cars closer to Indian buyers.

For car lovers, this is not just policy news. This could be the beginning of a new era for premium cars in India.


 

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