NEW DELHI: In a groundbreaking decision, India is preparing to slash tariffs on cars imported from the European Union, dramatically decreasing the rates from a staggering 110% to just 40%. This significant reduction is part of ongoing negotiations for a free trade agreement, which is expected to be finalised shortly, thereby opening India's automotive market to European manufacturers.

Prime Minister Narendra Modi's administration is expected to roll out this tax reduction immediately for a selected group of vehicles valued over 15,000 euros, with plans to decrease tariffs further to 10% over time. Insiders reveal that, despite confidentiality around the details, industry experts believe this initiative represents a potential game-changer for European automotive giants like Volkswagen and BMW. The reform aims to afford them greater access into a market that has traditionally been fiercely protected.

Referred to as 'the mother of all deals', this comprehensive trade pact is seen as a crucial step not only to enhance bilateral trade but also to help diversify India's export portfolio beyond its traditional mainstays of textiles and jewels. With European automakers currently holding a small share of the Indian market, this new tariff structure is poised to present substantial growth opportunities. Analysts predict that as barriers are lowered, these giants could significantly expand their presence in India's dynamic automotive sector, catering to an increasingly affluent consumer base eager for international standards and quality in vehicle production.