New Delhi: Reduction in customs duty on imported cars under the India-EU free trade agreement could enable the growth of the luxury car segment in India, which currently remains minuscule, BMW Group India President and CEO Hardeep Singh Brar said on Monday.
The domestic luxury car segment accounts for just 1 per cent of the overall passenger vehicle segment.
The India-EU Free Trade Agreement would be a historic milestone benefiting both sides by expanding trade and enabling deeper exchange of technology and innovation, Brar said in a statement.
"From an automotive industry perspective, we hope the FTA will include balanced, win-win provisions that help stimulate demand in the luxury segment while strengthening supply chain integration which is especially important in the current geopolitical context," he added.
If customs duties on completely built units are reduced, it would help expand the luxury car market in India, Brar stated.
"While CBUs (completely built units) currently account for about 5 per cent of our sales, such a framework would allow us to broaden our product portfolio, introduce globally popular models and test new offerings," he stated.
If demand scales up, it could also support deeper localisation over time, he added.
"Given that luxury vehicles form only about 1 per cent of the passenger vehicle market, this would benefit consumers without impacting mass market players, making it a genuine win-win for both India and the EU," Brar said.
At present, imported passenger vehicles priced below USD 40,000 attract a basic customs duty of 70 per cent, and those priced above USD 40,000 are taxed at an effective customs duty of 110 per cent.
He noted that there is a strong and positive signal of confidence in India's long-term growth story.
India today is not just a large market, but a future-ready economy backed by reforms and policies focused on building a globally competitive ecosystem, he added.
India and the EU are expected to announce on Tuesday the conclusion of protracted negotiations for the free trade pact, after which the two sides will finalise the details and ratify what is being called "the mother of all deals.
The pact could expand bilateral trade and lift Indian exports of goods such as textiles and jewellery, which have been hit by 50% U.S. tariffs since late August.
India is the world's third-largest car market by sales after the U.S. and China, but its domestic auto industry has been one of the most protected. New Delhi currently levies tariffs of 70% and 110% on imported cars, a level often criticised by executives, including Tesla chief Elon Musk.With inputs from PTI
The domestic luxury car segment accounts for just 1 per cent of the overall passenger vehicle segment.
The India-EU Free Trade Agreement would be a historic milestone benefiting both sides by expanding trade and enabling deeper exchange of technology and innovation, Brar said in a statement.
"From an automotive industry perspective, we hope the FTA will include balanced, win-win provisions that help stimulate demand in the luxury segment while strengthening supply chain integration which is especially important in the current geopolitical context," he added.
If customs duties on completely built units are reduced, it would help expand the luxury car market in India, Brar stated.
"While CBUs (completely built units) currently account for about 5 per cent of our sales, such a framework would allow us to broaden our product portfolio, introduce globally popular models and test new offerings," he stated.
If demand scales up, it could also support deeper localisation over time, he added.
"Given that luxury vehicles form only about 1 per cent of the passenger vehicle market, this would benefit consumers without impacting mass market players, making it a genuine win-win for both India and the EU," Brar said.
At present, imported passenger vehicles priced below USD 40,000 attract a basic customs duty of 70 per cent, and those priced above USD 40,000 are taxed at an effective customs duty of 110 per cent.
He noted that there is a strong and positive signal of confidence in India's long-term growth story.
India today is not just a large market, but a future-ready economy backed by reforms and policies focused on building a globally competitive ecosystem, he added.
India and the EU are expected to announce on Tuesday the conclusion of protracted negotiations for the free trade pact, after which the two sides will finalise the details and ratify what is being called "the mother of all deals.
The pact could expand bilateral trade and lift Indian exports of goods such as textiles and jewellery, which have been hit by 50% U.S. tariffs since late August.
India is the world's third-largest car market by sales after the U.S. and China, but its domestic auto industry has been one of the most protected. New Delhi currently levies tariffs of 70% and 110% on imported cars, a level often criticised by executives, including Tesla chief Elon Musk.With inputs from PTI
