Core Viewpoint - India is set to significantly reduce import tariffs on European Union (EU) cars from a maximum of 110% to 40%, marking a major step towards opening its market and potentially finalizing a free trade agreement with the EU [1][2]. Group 1: Tariff Reduction Details - India plans to lower the import tariff on cars from the EU, with immediate reductions for vehicles priced over €15,000 (approximately $17,700) [2]. - Future tariff reductions could bring the rate down to 10%, benefiting major European car manufacturers like Volkswagen, Mercedes-Benz, and BMW [2][3]. - The Indian government proposes an annual quota of 200,000 internal combustion engine vehicles subject to the 40% tariff, representing a significant liberalization of the automotive sector [2][3]. Group 2: Market Impact - The reduction in tariffs is expected to benefit European car manufacturers, which currently hold less than 4% of the Indian automotive market, while local brands like Maruti Suzuki and Mahindra dominate with a two-thirds market share [3]. - The Indian automotive market is projected to grow to 6 million annual sales by 2030, prompting companies like Renault and Volkswagen to invest in new strategies and production plans [3]. Group 3: Related Trade Developments - U.S. Treasury Secretary Janet Yellen indicated that there may be a path to easing tariffs on India, contingent on India's reduced oil imports from Russia [4][5]. - The U.S. has imposed a 25% punitive tariff on Indian goods, raising overall tariffs to about 50%, which India has resisted, emphasizing its commitment to protecting consumer interests [5][6].