New Delhi: The proposed Free Trade Agreement (FTA) between India and the European Union (EU) is expected to give a significant boost to the small luxury car segment in India by reducing import duties. This was stated by Hardeep Singh Brar, President and CEO of BMW Group India, on Monday.
Brar highlighted that currently, the luxury car segment accounts for only about one percent of the overall passenger vehicle market in India. He expressed optimism that lower import tariffs could substantially increase this share.
Significance of India-EU Free Trade Agreement
According to Brar, India is not only a large market but also an economy poised for the future, supported by reforms and policies aimed at building a globally competitive ecosystem. He described the India-EU FTA as a historic milestone that will enhance trade and deepen the exchange of technology and innovation between the two partners.
He emphasised that the agreement would be mutually beneficial, fostering growth in trade relations and encouraging technological collaboration.
Impact on Automotive Industry and Luxury Car Market
Brar stated that the FTA should include balanced and mutually advantageous provisions that support the demand for luxury vehicles and strengthen supply chains. He noted that reducing customs duties on Completely Built Units (CBUs) would improve the accessibility of imported luxury cars, thereby expanding the market within India.
Currently, CBUs constitute about five percent of BMW’s total sales in India. Brar added, “If customs duties on CBUs are lowered, it will aid the expansion of the luxury car market in India.”
Benefits for Consumers and the Broader Market
He further clarified that reduced duties on luxury cars would benefit consumers without affecting manufacturers of non-luxury vehicles, as luxury cars represent only a small fraction of India’s passenger vehicle market.
Thus, the India-EU FTA’s import duty concessions are expected to foster growth in the luxury automobile sector, providing more options for buyers and encouraging innovation in the industry.
My name is Bhupendra Singh Chundawat. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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