Today vs Tomorrow: Car Prices in India Before and After EU-India FTA – Will Luxury Cars Like BMW, Mercedes & Audi Become Affordable?
EU-India Free Trade Agreement 2026 slashes import duties on European cars from 110% to as low as 10% in phases – but quota limits & local assembly mean real price drops mainly for premium imports.
EU-India FTA 2026: Which Luxury Cars Get Cheaper? Full List, Affected Models & Realistic Price Predictions
BMW M cars, Mercedes-AMG, Porsche 911, Lamborghini & more — how much could prices really drop after the “mother of all deals”?
Could the new India-EU trade deal finally bring European luxury within reach for more Indian buyers? (Representational)
After years of negotiations, India and the European Union signed a historic Free Trade Agreement (FTA) on January 27, 2026 — widely called the "mother of all deals".
The agreement includes a clear roadmap to dramatically reduce import duties on European passenger vehicles — especially high-end fully built-up (CBU) imports that currently face 100–110% duties. Initial reduction targets ~30–40% (within quota), with a long-term goal of 10% over the next 5–10 years.
However, the relief is not uniform: locally assembled CKD models (the majority of BMW, Mercedes, Audi, Volvo sales in India) will see little to no short-term benefit. EU-made electric vehicles get no duty cut for at least the first 5 years. Spare parts and components will gradually move toward zero duty — promising lower ownership costs across the board.
EU-India FTA – Key Numbers & Rules for Cars
- Current CBU duty: 100–110% → Initial: ~30–40% (within quota) → Long-term: 10%
- Annual quota: ~2.5 lakh (250,000) vehicles priced above ~€15,000 (~₹16–17 lakh)
- Likely effective from: FY 2027–28 (after ratification)
- EU EVs: No duty reduction for first 5+ years
- CKD locally assembled models: Duties already ~15–20% → minimal short-term change
- Spare parts & components: Phased reduction to 0% over 5–10 years
Today vs Post-FTA: Estimated Ex-Showroom Prices (Focus on CBU Imports)
Prices are approximate 2026 ex-showroom (pan-India avg). Reductions apply mainly to fully imported CBUs within quota. Actual savings depend on brand pricing, forex, GST/cess (~28–30%), and quota availability. Scroll horizontally on mobile.
| Model / Variant (Import Type) | Current Ex-Showroom (2026) | Expected Post-FTA (Within Quota) | Potential Saving |
|---|---|---|---|
| BMW 3 Series (Mostly CKD) | ₹52–75 lakh | ₹50–72 lakh | 0–8% |
| Mercedes C-Class (Mostly CKD) | ₹61–72 lakh | ₹58–70 lakh | 0–10% |
| Audi A4 (Mostly CKD) | ₹46–56 lakh | ₹44–54 lakh | 5–10% |
| Volvo XC60 (Mixed) | ₹67–78 lakh | ₹52–65 lakh | 18–25% |
| BMW X3 / X5 imported trims | ₹71–1.05 Cr | ₹52–80 lakh? | Up to 25–30% |
| Mercedes GLC / GLE imported + AMG | ₹75 lakh – 1.8 Cr | ₹55 lakh – 1.3 Cr? | 20–35% |
| BMW M3 / M4 / M5 (CBU) | ₹1.45–3.2 Cr | ₹1–2.3 Cr? | 25–40% |
| Mercedes-AMG / Maybach (CBU) | ₹1.6–5 Cr+ | ₹1.1–3.5 Cr? | 25–45% |
| Porsche Macan (Mostly CBU) | ₹90 lakh – 1.55 Cr | ₹65 lakh – 1.15 Cr? | 25–35% |
| Porsche Cayenne / 911 (CBU) | ₹1.45–4 Cr+ | ₹1–3 Cr? | 30%+ |
| Lamborghini Huracán / Urus (CBU) | ₹3.2–6.5 Cr+ | ₹2.2–4.8 Cr? | High impact |
| Ferrari Roma / Portofino (CBU) | ₹3.8–8 Cr+ | ₹2.6–6 Cr? | High impact |
Who Really Wins? Short vs Long-Term Impact
Short–Medium Term Big Winners
Fully imported performance & ultra-luxury: BMW M / Mercedes-AMG / Maybach / Porsche entire range / Lamborghini / Ferrari / select Audi RS / Volvo high-end. Expect richer variants, more aggressive pricing, and fiercer showroom competition.
Minimal Short-Term Change
Locally assembled volume models: BMW 3/5 Series/X1/X3, Mercedes C/E/GLC/GLA, Audi A4/A6/Q5/Q7, Volvo XC40/XC60/XC90. Prices expected to remain largely stable in the first 2–3 years.
Long-Term Benefits for Everyone
Cheaper spare parts & servicing across all brands, more direct EU model launches, increased competitive pressure → better deals even on locally assembled cars over time.
European luxury dream cars could gradually become significantly more accessible
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