The India-EU Free Trade Agreement provides the European automobile industry with an initial annual quota of 100,000 completely built-up internal-combustion and non-plug-in hybrid cars, with the quota set to rise to 160,000 vehicles by the 10th year and remain at that level thereafter, according to the agreement’s texts and annexures published on Friday.
The concession marks a significant opening of India’s sensitive automobile market to European manufacturers, with cars entering within the quota eligible for substantially lower tariffs subject to their price and other conditions.
For cars priced between €15,000 and €35,000, the in-quota duty will fall from the current 110% to 35% in the first year and to 10% from the fifth year. For cars priced above €35,000, the duty will decline from 66% to 30% in the first year and to 10% from the fifth year.
The quota is divided among different price bands, with 43,000 units reserved for cars priced above €50,000 from the fifth year. Cars priced below €15,000 will not receive preferential treatment.
India will also reduce tariffs on EU cars imported beyond the quota. For cars priced between €15,000 and €50,000, the out-of-quota duty will gradually fall to 35% by the 10th year, depending on the existing tariff. For cars priced above €50,000, it will fall to 30%.
The agreement also provides a separate quota for completely knocked-down internal-combustion and hybrid cars. The quota will be 75,000 units annually for the first five years before gradually declining to 50,000 units from the 10th year.
The in-quota duty on these vehicles will fall from 13.75% in the first year to 8.25% from the third year, compared with the current 16.5%.
For battery-electric vehicles, plug-in hybrids and cars using other eligible technologies, concessions will begin from the fifth year. The quota for completely built-up vehicles will start at 20,000 units in the fifth year, rise to 50,000 in the 10th year and reach 90,000 from the 14th year. The in-quota duty on these vehicles will fall from 30% in the fifth year to 10% in the 10th year. Vehicles priced below €20,000 will not receive the concession.
Wine, alcohol
The agreement also provides substantial tariff concessions for European wines, with duties linked to the CIF value per 750 ml. CIF value is the total cost of imported goods, combining the product's price, marine insurance, and freight charges up to the destination port.
Wines valued below €2.50 per 750 ml will receive no concession and will continue to face the base customs duty of 150%.
For wines valued between €2.50 and €10, the duty will fall to 75% in the first year and gradually decline to 30% from the eighth year.
For wines valued at €10 or more per 750 ml, the duty will fall from 150% to 75% in the first year and progressively to 20% from the eighth year.
The concessions cover sparkling wine, wine in containers and in bulk, grape must, vermouth and other flavoured wines.
India has also offered concessions on certain fermented beverages and high-strength alcoholic products other than wine. Products valued below $5 per 750 ml will continue to face the 150% base duty. For products valued at $5 or more, the duty will fall to 100% in the first year and decline by five percentage points annually to 50% from the 11th year.
Pork, fruits
India will allow 2,000 tonnes of EU pork to enter annually at concessional tariffs. The in-quota duty will decline from 31.82% in the first year to 20% from the 11th year. Imports beyond the quota will not receive a tariff concession.
For apples, the agreement provides a growing quota for imports with a CIF price of at least Rs 80 per kg. The quota will start at 50,000 tonnes in the first year and increase by 5,000 tonnes annually to reach 100,000 tonnes from the 11th year.
Apples within the quota will attract a 20% duty, while those priced below Rs 80 per kg will continue to face a 50% duty. Imports exceeding the quota will not receive the preferential tariff.
India will allow 12,000 tonnes of EU kiwifruit under the quota in the first year. The quota will rise by 300 tonnes annually to reach 15,000 tonnes from the 11th year. The in-quota duty will fall from 16.5% in the first year to 10% from the sixth year.
For pears, India has provided a fixed annual quota of 2,250 tonnes. The in-quota duty will decline gradually from 29.17% in the first year to 10% from the sixth year.
The concession for peaches is much smaller, with an annual quota of just 20 tonnes. Imports within the quota will face a duty of 26.4%, while imports beyond the quota will not receive preferential tariff treatment.
The tariff-rate quotas allow India to provide greater market access to European products while retaining tariff protection for domestic producers outside the specified quantity, price and eligibility conditions.