India is poised to make a historic shift in its trade policy by slashing import tariffs on cars from the European Union to 40% from as high as 110%, according to sources and Reuters reports on January 25–26, 2026. ([The Economic Times][1]) This concession is part of a long-awaited India-EU Free Trade Agreement (FTA) expected to be formally announced around January 27, 2026, and has been dubbed the "mother of all deals” by trade officials. Under the deal, duties on certain European cars priced above €15,000 will be cut immediately, with further reductions over time toward 10%, easing market a

India is poised to make a historic shift in its trade policy by slashing import tariffs on cars from the European Union to 40% from as high as 110%, according to sources and Reuters reports on January 25–26, 2026. ([The Economic Times][1]) This concession is part of a long-awaited India-EU Free Trade Agreement (FTA) expected to be formally announced around January 27, 2026, and has been dubbed the "mother of all deals” by trade officials.

Under the deal, duties on certain European cars priced above €15,000 will be cut immediately, with further reductions over time toward 10%, easing market access for brands like Volkswagen, Mercedes-Benz, and BMW. Battery electric vehicles (EVs) are excluded from cuts for the first five years to protect India’s emerging EV sector. The move marks India’s most significant opening of its vast auto market and could reshape trade and investment flows between the world’s third-largest car market and the EU. Source: Reuters

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