India and the European Union have signed a historic trade deal that will gradually reduce import duties on European cars from 110 percent to 10 percent. Called the India-European Union Free Trade Agreement (India-EU FTA), this pact will reduce tariffs on 2.5 lakh imported cars per year. The deal also stipulates that duties on imported European auto parts will be completely abolished after 5 to 10 years. For reference, currently, India imposes 70 percent import duty on cars priced below USD 40,000, which means approx. Rs 36.66 lakh, and 110 percent import duty on cars priced above USD 40,000.
While the agreement was finalised on 27 January 2026, the reductions in tariffs will come into effect in phases in the next few years. In the first phase, the import duties will be reduced to 40 percent, and then they will gradually come down to 10 percent. A key point to note is that the India-EU FTA will be applicable to cars that cost above 15,000 euros, which means around Rs 16.31 lakh. Moreover, electric vehicles are excluded from this agreement for the first five years; then, they may be included.
Here is a look at the best European car brands in India and how their imported cars will be priced once the India-EU FTA comes into effect.
Note:
CBU – CBU means completely built units. Cars which are built from start to end on foreign land, and then are imported/exported as a completely built product.
CKD – CKD means completely knocked down. Cars which are manufactured in a foreign land as parts and assemblies, and then are imported to India and assembled here.
Mercedes-Benz
The best-selling luxury car brand in India, Mercedes-Benz, is one of the most popular European car brands in India. Although most of the Mercedes-Benz cars are already manufactured in India, only a few of its cars that are imported as CBUs will have their prices reduced due to the India-EU FTA.
| European Car | Current ex-showroom price | Expected Price with 40% tariff | Expected Price with 10% tariff |
| Mercedes-Benz G-Wagon (AMG G 63) | Rs. 3.59 Cr | Rs. 2.39 Cr | Rs. 1.88 Cr |
| Mercedes-Benz AMG SL | Rs. 2.34 Cr | Rs. 1.56 Cr | Rs. 1.22 Cr |
| Mercedes-Benz AMG GT 4 Door Coupe 63 S E Performance | Rs 3.27 Cr | Rs. 2.18 Cr | Rs 1.71 Cr |
| Mercedes-Benz Maybach S-Class | Rs 2.74 – 3.47 Cr | Rs. 1.82 – 2.31 Cr | Rs. 1.43 – 1.81 Cr |
| Mercedes-Benz AMG CLE 53 | Rs 1.28 Cr | Rs. 85 lakh | Rs. 67 lakh |
BMW
BMW is the second-best-selling luxury car brand in India, and like Mercedes-Benz, this European car brand manufactures most of its cars in India. Some of the cars which the BMW imports as CBUs and will see price reduction are M2, M4 Competition, M5, and others.
| European Car | Current ex-showroom price | Expected Price with 40% tariff | Expected Price with 10% tariff |
| BMW M2 | Rs. 1 Cr | Rs. 66.66 lakh | Rs. 52.38 lakh |
| BMW M4 Competition | Rs. 1.52 Cr | Rs. 1.01 Cr | Rs. 79.61 lakh |
| BMW M5 | Rs. 2.01 Cr | Rs. 1.34 Cr | Rs. 1.05 Cr |
| BMW M8 Coupe Competition | Rs. 2.38 Cr | Rs. 1.58 Cr | Rs. 1.24 Cr |
| BMW Z4 | Rs. 87.90 – 92.60 lakh | Rs. 58.60 – 61.73 lakh | Rs. 46.04 – 48.50 lakh |
| BMW XM | Rs. 2.55 Cr | Rs. 1.70 Cr | Rs. 1.33 Cr |
Audi
Audi is one of the most famous European car brands in India. Once the India-EU FTA comes into place, many Audi car seekers will be pleased with price cuts of high-end Audi cars that are imported as CBUs, for example,
| European Car | Current ex-showroom price | Expected Price with 40% tariff | Expected Price with 10% tariff |
| Audi RS Q8 | Rs. 2.32 Cr | Rs. 1.54 Cr | Rs 1.21 Cr |
| Audi Q8 | Rs. 1.10 Cr | Rs. 73.33 lakh | Rs. 57.61 lakh |
Jaguar Land Rover
Tata Motors-owned British luxury carmaker, Jaguar Land Rover, is a popular European car brand and one of the best-selling luxury car brands in India. Land Rover cars, especially the Defender series, which is imported as CBUs, have found great fame among celebrities and elites, making them some of the most aspirational cars. With the India-EU FTA, the Defender series will become significantly more affordable.
| European Car | Current ex-showroom price | Expected Price with 40% tariff | Expected Price with 10% tariff |
| Land Rover Defender | Rs. 98 lakh – 2.60 Cr | Rs. 65.33 lakh – 1.73 Cr | Rs. 51.33 lakh – 1.36 Cr |
Volkswagen
The German auto giant, Volkswagen, has spent decades in India. Currently, along with selling some mass-market cars, the European car brand sells some premium cars, which will benefit from the India-EU FTA.
| European Car | Current ex-showroom price | Expected Price with 40% tariff | Expected Price with 10% tariff |
| Volkswagen Golf GTI | Rs. 50.91 lakh | Rs. 33.94 lakh | Rs. 26.66 lakh |
| Volkswagen Tiguan R-Line | Rs 45.73 lakh | Rs. 30.48 lakh | Rs. 23.95 lakh |
Skoda
The sister brand of Volkswagen, Skoda, is as popular and in-demand as Volkswagen. Known for the unmatched premium quality of its cars, this European brand is destined to see a rise in queries for its iconic cars like the Skoda Octavia, which is imported as a CBU, and will see a significant drop in its price once the India-EU FTA comes into effect.
| European Car | Current ex-showroom price | Expected Price with 40% tariff | Expected Price with 10% tariff |
| Skoda Octavia RS | Rs. 49.99 lakh | Rs. 33.32 lakh | Rs. 26.18 lakh |
Lamborghini
When it comes to the luxury sports car brand in India, Lamborghini is the biggest name. The Italian carmaker imports all its cars as CBUs, and as a European car brand, it expected to cut the prices of its cars by a big margin with the India-EU FTA in place.
| European Car | Current ex-showroom price | Expected Price with 40% tariff | Expected Price with 10% tariff |
| Lamborghini Urus | Rs. 4.18 – 4.57 Cr | Rs. 2.78 – 3.04 Cr | Rs. 2.18 – 2.39 Cr |
| Lamborghini Revuelto | Rs. 8.89 Cr | Rs. 5.92 Cr | Rs. 4.65 Cr |
| Lamborghini Temerario | Rs. 6 Cr | Rs. 4 Cr | Rs. 3.14 Cr |
Ferrari
Another luxury car brand from Italy, Ferrari, is an illustrious name around the world. In India, like Lamborghini, Ferrari imports all its cars as CBUs and will greatly benefit from the India-EU FTA.
| European Car | Current ex-showroom price | Expected Price with 40% tariff | Expected Price with 10% tariff |
| Ferrari 296 GTB | Rs. 5.40 Cr | Rs. 3.60 Cr | Rs. 2.82 Cr |
| Ferrari SF90 Stradale | Rs. 7.50 Cr | Rs. 5 Cr | Rs. 3.92 Cr |
| Ferrari Roma | Rs. 3.76 Cr | Rs. 2.50 Cr | Rs. 1.96 Cr |
Porsche
The German high-end sports car manufacturer, Porsche, imports all its cars as CBUs, and like other European car brands, it will get an opportunity to reduce its car prices with the India-EU FTA.
| European Car | Current ex-showroom price | Expected Price with 40% tariff | Expected Price with 10% tariff |
| Porsche 911 | Rs. 2 – 3.80 Cr | Rs. 1.33 – 2.53 Cr | Rs. 1.04 – 1.99 Cr |
| Porsche Panamera | Rs. 1.71 – 2.33 Cr | Rs. 1.14 – 1.55 Cr | Rs. 89.57 lakh – 1.22 Cr |
| Porsche Cayenne | Rs. 1.39 – 1.94 Cr | Rs. 92.66 lakh – 1.29 Cr | Rs. 72.80 lakh – 1.01 Cr |
Bentley
The British luxury car brand, Bentley, has a handful of cars on sale in India, and all of those are imported as CBUs. Being a European car brand, Bentley can bring its car prices down once the India-EU FTA is rolled out.
| European Car | Current ex-showroom price | Expected Price with 40% tariff | Expected Price with 10% tariff |
| Bentley Bentayga | Rs. 5 – 6.75 Cr | Rs. 3.33 – 4.50 Cr | Rs. 2.61 – 3.53 Cr |
| Bentley Continental | Rs. 5.23 – 8.45 Cr | Rs. 3.48 – 5.63 Cr | Rs. 2.73 – 4.42 Cr |
| Bentley Flying Spur | Rs. 5.25 – 7.60 Cr | Rs. 3.50 – 5.06 Cr | Rs. 2.75 – 3.98 Cr |
Rolls-Royce
Arguably, Rolls-Royce is the gold standard in the world of luxury cars. In India, Rolls-Royce has few cars on sale, and their prices are expected to see reductions with the India-EU FTA.
| European Car | Current ex-showroom price | Expected Price with 40% tariff | Expected Price with 10% tariff |
| Rolls-Royce Ghost Series II | Rs. 8.95 – 10.52 Cr | Rs. 5.96 – 7.01 Cr | Rs. 4.68 – 5.51 Cr |
| Rolls-Royce Phantom | Rs. 8.99 – 10.48 Cr | Rs. 5.99 – 6.98 Cr | Rs. 4.70 – 5.48 Cr |
| Rolls-Royce Cullinan | Rs. 10.50 – 12.25 Cr | Rs. 7 – 8.16 Cr | Rs. 5.50 – 6.41 Cr |
Maserati
A lesser-known luxury car brand in India, Maserati, sells a few cars here, and all of them are imported as CBUs.
| European Car | Current ex-showroom price | Expected Price with 40% tariff | Expected Price with 10% tariff |
| Maserati Grecale | Rs. 1.31 – 2.05 Cr | Rs. 87.33 lakh – 1.36 Cr | Rs. 68.61 lakh– 1.07 Cr |
| Maserati GranTurismo | Rs. 2.25 – 2.51 Cr | Rs. 1.5 – 1.67 Cr | Rs. 1.17 – 1.31 Cr |
| Maserati Levante | Rs. 1.49 – 1.64 Cr | Rs. 99.33 lakh – 1.09 Cr | Rs. 78.04 lakh – 85.90 lakh |
Conclusion
While the India-EU FTA promises a prosperous future for the Indian automobile industry, it would be unwise to expect magical drops in prices of the high-end European cars. In the process of cutting down prices, manufacturers are certainly expected to manipulate their profit margins. Moreover, this historic agreement can yield some interesting turns of events, and European car brands can experiment with different body types and powertrains. Let’s wait and watch and hope for the best possible outcomes for Indian buyers as well as the automobile market.
FAQs
Which European car brands sell their cars in the Indian market?
European car brands which sell their cars in India are Mercedes-Benz, BMW, Audi, Jaguar Land Rover, Volkswagen, Skoda, Lamborghini, Bentley, Ferrari, Volvo, Porsche, Rolls-Royce, and Maserati.
What is the India-European Union Free Trade Agreement (India-EU FTA)?
The India-European Union Free Trade Agreement (India-EU FTA) will drop the import duty on imported high-end European cars from 110 percent to 10 percent. This pact will be applicable for 2.5 lakh imported cars per year, and it also stipulates that duties on imported European auto parts will be completely abolished after 5 to 10 years. The decrement in the import duty on imported high-end European cars will be done in phases; in the next few years, the import duties will be reduced to 40 percent, and then they will gradually come down to 10 percent. Notably, only the cars that cost above 15,000 euros, which means around Rs 16.31 lakh, will be eligible for the India-EU FTA. Moreover, electric vehicles are excluded from this agreement for the first five years; then, they may be included.
Will all Mercedes-Benz cars become cheaper with the India-European Union Free Trade Agreement (India-EU FTA)?
Most Mercedes-Benz cars are manufactured in India. Since the India-European Union Free Trade Agreement will apply only to cars imported as completely built units (CBUs), it will not reduce tariffs on all Mercedes-Benz cars.
Which BMW cars will become cheaper with the India-European Union Free Trade Agreement (India-EU FTA)?
BMW cars imported into India as CBUs are expected to become cheaper under the India-European Union Free Trade Agreement. Some of these cars are the BMW M2, BMW M4 Competition, BMW M5, BMW M8 Coupe, BMW Z4, and BMW XM.
