BMW Group India President and CEO Hardeep Singh Brar on Monday said the reduction in custom duty on imported cars under the India-EU FTA could accelerate the growth of the luxury car segment in India, which is currently very low. The share of luxury cars in the total passenger car segment of the country is only 1 percent. Brar said in a statement that the India-EU Free Trade Agreement will be a historic milestone that will expand trade, benefitting both sides by enabling exchange of technology and innovation.
Will help in expanding the luxury car market in India
Hardeep Singh Brar said, “From the automotive industry’s perspective, we are hopeful that the FTA will include balanced and win-win provisions that will help stimulate demand in the luxury car segment as well as strengthen supply chain integration. This is especially important in the current geopolitical context.” Brar said if customs duty on completely built units (CBUs) is reduced, it will help in the expansion of the luxury car market in India.
How much customs duty does the Indian government currently collect on imported vehicles?
“Although currently the share of CBUs (imported units) in our sales is around 5 per cent, such a structure will allow us to broaden our portfolio, introduce globally popular models and test new products. This will be a true win-win for both India and the EU,” he said. Currently, imported passenger vehicles priced below $40,000 attract a basic customs duty of 70 per cent, while vehicles priced above $40,000 attract an effective customs duty of 110 per cent.
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