A new trade agreement entered into between India and the European Union is expected to come into effect. This new agreement will make imported, luxury vehicles more affordable as the Government plans on reduction of import duty on vehicles imported from Europe into India while at the same time facilitating export of small cars from India to Europe. Talks are still in initial stages, but should be finalized soon which will make European luxury vehicles more accessible to Indian buyers.
This agreement has not gone down well with Society of Indian Automobile Manufacturers (SIAM) who is against this move to reduce taxes. SIAM is of the opinion that any move to bring down taxes on import of vehicle would be disadvantageous in the future.
SIAM have cautioned against this move. They fear it will adversely affect Indian manufacturers, who will hence be restricted to manufacture of small cars alone. Buyers will opt for lesser priced imported vehicles in the larger and more advanced categories.
Currently, buyers of imported vehicles have to shell out 60% and above for their vehicles while the new ruling will bring about a 50% cut in import duty for vehicle imported from European countries. Indian auto companies such as Maruti Suzuki, Hyundai and Renault Nissan will also be benefited to a large extent as it will lead to higher sales volumes.