Car Prices Could Drop Soon: Anushka Rathod Explains the India-EU FTA Effect

As finance influencer Anushka Rathod explains, India may be on the brink of one of its biggest trade policy shifts in decades, one that could directly impact how much you pay for imported cars. With EU officials currently in India to seal the long‑pending India–EU Free Trade Agreement (FTA), often called the “mother of all deals,” major changes in customs duties appear closer than ever. According to multiple Reuters‑cited reports, the implications for the automobile sector could be significant.

A Historic Trade Pact in the Making:

India and the European Union have spent nearly two decades negotiating the FTA. A formal announcement is expected within the next 1–2 days, according to sources cited by Reuters and leading financial publications. The agreement aims to reshape trade flows between two markets that together represent nearly two billion people. 

The automobile sector has emerged as one of the most talked‑about segments in the negotiations because of India's current steep import duties of 70% to 110% on fully built imported cars. These tariffs have long been criticised globally for making international models disproportionately expensive.

What May Change for Car Buyers

As per Reuters‑linked reports, India is considering slashing import duties to 40%, specifically for a limited number of higher‑priced imported models (above €15,000). Over time, these duties could fall even further, potentially reaching 10%, marking the biggest opening of India's auto market yet.

This shift would not happen overnight. The reductions would be phased in and capped under an annual import quota (between 200,000 and 250,000 units), ensuring domestic manufacturers remain protected. Electric vehicles, in particular, will not see duty reductions for the first five years. 

Why Waiting Could Save Buyers Lakhs:

If duties fall from 110% to 40% and eventually to 10%, the price of certain imported vehicles could drop substantially. Even a 30–40% reduction in tax burden can meaningfully lower the final on‑road price.

This is why Anushka Rathod cautions buyers: If the FTA is finalised, today's premium‑segment prices may look very different a year from now. For anyone planning a high‑value purchase, patience could translate into real savings.

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