The European Union and India have reached a free trade agreement that is expected to significantly benefit Europe’s automotive industry. The deal opens access to India’s passenger car market of around 4 million units, which has long been protected by import tariffs of up to 110%. 

Under the agreement, EU car exports worth €1.6 billion will see tariffs gradually reduced to 10% within a quota of 250,000 vehicles per year, while tariffs on auto parts will be fully eliminated within 5 to 10 years.

The agreement also covers iron ore and steel exports valued at €1.5 billion, with current tariffs as high as 22% set to fall to near zero. 

Strict rules of origin were agreed to prevent tariff circumvention. 

India, the world’s second-largest steel producer, remains affected by the EU’s carbon border mechanism, though future flexibility may be considered.