India and the US are set to finalize a trade agreement in order to reduce duties on luxury cars, EVs not included.

India and the United States are inching towards finalising a trade agreement that will make luxury cars more affordable by reducing the import duties on luxury American cars, as stated by a Reuters report. However, EVs will not be included in this agreement. 

According to these proposed guidelines, import duties on luxury US-made international ICE-cars will be significantly reduced by 30%. These reductions will be only applicable to internal combustion engine vehicles with above 3,000 cc engine capacity and will be having a 10-year registration period. 

EVs Excluded from this Tariff

Electric vehicles are purposefully excluded from this agreement. This puts an end to a possibility of lower import duties on EVs like Tesla, which has issued India’s higher import taxes as a major hurdle in tapping Indian markets. 

This is possible due to India’s trade agreements with the European Union, which announced the significant reduction in tariffs by keeping them as low as 10% across a wider range of vehicles, which also includes various price concessions on some electric cars. One of the most important things to notice is that India is implementing different tariff policies across various trade partners.