India has drawn clear red lines in its newly concluded free trade agreement (FTA) with the European Union, fully protecting its mass-market automobile
segment and sensitive agricultural products while allowing controlled access to high-end vehicles from the bloc. The commerce and industry ministry clarified on Wednesday that staples such as dairy, rice, wheat, pulses, and other key farm goods remain outside the scope of tariff concessions, and genetically modified products have not been permitted. India and the EU wrapped up negotiations for the long-awaited FTA on Tuesday, and the agreement is expected to be signed and rolled out later this year. Limited Access To The Market According to a report from The Economic Times, officials said that India has offered import duty concessions only for passenger vehicles priced above Rs 25 lakh, subject to an annual quota of 250,000 units. This concession is largely aimed at traditional European automakers. The quota includes 160,000 petrol and diesel vehicles and 90,000 electric vehicles (EVs). Crucially, there are no tariff relaxations for cars priced below €15,000 CIF value. Once duties, GST, and road taxes are added, this category corresponds to a retail price of roughly Rs 25–27 lakh. “About 90 per cent of India’s mass market in the domestic passenger car segment comes in the sub-Rs 25 lakh price category,” the official said, underlining why this segment remains fully protected. How Auto Import Duties Will Change Over Time For petrol and diesel vehicles, the import quota is split into three pricing brackets. Cars priced between €15,000 and €35,000 will see duties cut to 35 per cent in the first year, with a quota of 34,000 units. Vehicles priced between €35,000 and €50,000, and those above €50,000, will face a 30 per cent duty, with 33,000 units allowed in each category. This brings the total first-year quota to 100,000 units. Over five years, duties in the 30–35 per cent range will be gradually reduced to 10 per cent from the current 110 per cent, while the quota will expand to 160,000 units. For EVs, the 90,000-unit quota is divided into three price bands: €20,000–40,000, €40,000–60,000, and above €60,000. Duty concessions on EVs will begin only in the fifth year of the agreement, encouraging EU manufacturers to introduce models and eventually manufacture locally. The total import quota will rise to 200,000 units by the 10th year and 250,000 units by the 14th year, while the CKD quota will be reduced over time. “In any time, India's quota will not cross 300,000. There is no duty cut on semi-knocked down units. We expect the numbers to be less than 2.5 per cent of our markets," the official said in the report. Agriculture: Firm Protection With Selective Openings India has chosen to fully safeguard sensitive farm sectors such as dairy, rice, wheat, pulses, tea, and coffee by offering no duty concessions. The official stressed that the dairy sector will always remain protected. Some limited openings have been created. Tariffs on EU apples will be reduced to 20 per cent, with imports capped at 50,000 tonnes and a minimum import price of Rs 80 per kg. In exchange, Indian apples will gain preferential access to the EU, with duties gradually reduced to zero over five to seven years. The EU, for its part, has excluded products such as meat, dairy, honey, rice, sugar, and tobacco, while India secures preferential access on nearly 87 per cent of agricultural tariff lines, including tea, coffee, spices, and table grapes.
