European Cars Get Cheaper in India Thanks to New FTA, But Who Really Benefits?
By Arjun Nair
Published January 28, 2026
India has signed a new Free Trade Agreement with the European Union. This deal reduces import duties on cars from up to 110% to 40% for now, but will be further lowered to 10% over five years. It applies to a quota of 250,000 vehicles each year.
For the Indian automotive market, this means luxury European cars could become more affordable and arrive faster with the latest technology. However, there is no change in import duties on electric vehicles for the next five years.
India signed a similar trade deal with the United Kingdom in July 2025, cutting tariffs on British imported cars, boosting options for buyers in the luxury segment.
Also Read: New India-Europe Trade Pact Drops Tax to Just 10 Percent
Popular cars like the Land Rover Defender, Lamborghini Urus, and Porsche 911 will now see a significant price cut, thanks to this FTA. Here is a short list of popular European cars sold in India that will get cheaper. We have included their current ex-showroom prices and estimated prices after the initial duty cut to 40%.
| Car Model | Current Price (₹) | Estimated Price (₹) after 40% Duty |
|---|---|---|
| Land Rover Defender | 1.00 crore | 75 lakh |
| Lamborghini Urus | 4.48 crore | 2.79 crore |
| Mercedes-AMG G 63 | 3.85 crore | 2.39 crore |
| Porsche 911 | 2.00 crore | 1.50 crore |
| Audi RS Q8 | 2.38 crore | 1.79 crore |
| Porsche Taycan | 1.70 crore | 1.28 crore |
| BMW M4 Coupe | 1.52 crore | 1.14 crore |
| Porsche Cayenne | 1.39 crore | 1.04 crore |
| Bentley Bentayga | 3.83 crore | 2.87 crore |
The Defender's massive price cut makes it a lot more affordable, and once the import duty is reduced to 10%, buyers can get one at around ₹54 lakh, nearly the price of a Toyota Fortuner.
While this FTA makes European cars cheaper in India, it is fair to say that its benefits are restricted to the upper-class demographic of the country. The deal only applies to cars costing over 15,000 Euros (₹16.28 lakh), while the majority of Indians spend ₹5 lakh to ₹15 lakh on a new car.
Moreover, there are rarely any European imported cars sold in India priced below the ₹40-50 lakh mark. The deal may start to look more attractive for them once the import tariffs are further reduced from 40% to around 10%, which is expected in the coming years. But until then, it is a lot more fun for the rich.
Accurate price changes shall be updated soon, following official confirmation from the carmakers.
Source: Gaadiwaadi Instagram (Defender, Urus, AMG G63 Prices)
Images: Respective carmakers
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