FTA to Boost 'Make in India': EU OEMs to Set Up Assembly Lines, Lower Car Prices
Economy
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CNBC TV18•28-01-2026, 20:39
FTA to Boost 'Make in India': EU OEMs to Set Up Assembly Lines, Lower Car Prices
- •Commerce Ministry sources indicate the India-EU FTA will encourage EU Original Equipment Manufacturers (OEMs) to establish local assembly lines in India, boosting "Make in India" through liberalized Completely Knocked Down (CKD) imports.
- •The FTA aims to transition foreign OEMs from importing to assembling and eventually to full localization, integrating high-end manufacturing, quality standards, and advanced R&D into the Indian ecosystem.
- •Liberalizing the auto sector and CKD imports will benefit Indian consumers by lowering vehicle prices due to reduced import duties, expanding choices, and ensuring higher safety and tech standards.
- •India's commitments include annual quotas for up to 160,000 Internal Combustion Engine (ICE) cars and 90,000 Electric Vehicles (EVs) with reduced tariff-graded structures, protecting sensitive segments of India's automotive industry.
- •The duty on imports of EU-made cars priced above ₹25 lakh is set to fall significantly from 66-110% to 30-35% initially, eventually reaching 10% for in-quota duties, while Indian cars gain duty-free access to the EU market.
Why It Matters: The India-EU FTA will attract EU auto manufacturers to India, lowering car prices and boosting local production.
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