India is preparing for a gradual shift in how imported cars are priced, following the proposed tariff changes under the India–European Union trade agreement. At present, fully imported cars attract very high duties, which limits their appeal to a small group of buyers. The new policy aims to reduce these duties in stages, making select global models more reachable over time.
This does not mean instant price drops or sudden market disruption. Instead, the policy is designed to work slowly, allowing buyers, manufacturers, and domestic players to adjust. For consumers, the change mainly affects cars brought in as complete units, not those assembled locally. Buyers planning a purchase in the coming years may find it useful to track how prices move and understand funding options such as a car loan before making a decision.
| Area | Current position | Expected direction |
|---|---|---|
| Import duty on CBUs | Very high | Gradual reduction |
| Model availability | Limited | Wider choice |
| Buyer access | Niche segment | Broader interest |
What is the new car tariff policy?
The new tariff policy focuses on lowering customs duties on cars that are fully manufactured outside India and imported as complete vehicles. Instead of a single large cut, the duty will be reduced in steps. This phased approach helps balance consumer interests with the need to protect local manufacturing.
The policy mainly benefits brands that import limited-volume or specialised models. Locally assembled cars will continue to follow existing tax structures.
| Policy point | Explanation |
|---|---|
| Vehicle type | Fully imported cars (CBUs) |
| Implementation | Step-by-step reduction |
| Long-term goal | Lower landed cost |
| Market intent | Controlled opening |
When does it come into effect?
Although the agreement has been announced, the tariff changes will not apply immediately. Several approvals are still required, including legal and parliamentary clearances on both sides. This process usually takes time.
Once approvals are complete, the first phase of duty reduction is expected to begin. Buyers who are not in a hurry can use this waiting period to plan budgets and check your new car loan eligibility so they are better prepared when revised prices appear.
| Phase | What happens |
|---|---|
| Approval stage | Legal review and ratification |
| Initial phase | Partial duty reduction |
| Later phase | Further duty cuts |
Which cars will become cheaper?
Only cars imported as complete units will see a direct benefit. Models that are already assembled in India using imported parts are unlikely to change in price due to this policy.
High-performance variants, limited-edition cars, and niche European models are the most likely to see a reduction. These are usually imported in small numbers and carry higher duties today.
| Car category | Likely impact |
|---|---|
| Performance imports | Noticeable benefit |
| Ultra-luxury cars | Improved pricing room |
| CKD models | Little to no change |
| Enthusiast models | Better access |
Cars market impact after tariff changes
The wider market impact will unfold gradually. Manufacturers may use the reduced duties to introduce models that were earlier considered too expensive for India. This allows brands to test demand without investing immediately in local assembly.
Over time, successful models could lead to new assembly plans, depending on buyer response.
| Market area | Possible outcome |
|---|---|
| Product mix | More imported options |
| Brand strategy | Trial-based launches |
| Competition | Moderate increase |
| Consumer choice | Expanded range |
Effect on car prices for consumers
From a buyer’s point of view, the biggest change will be in ex-showroom prices of fully imported cars. A lower duty reduces the base cost, though the final saving will depend on taxes, exchange rates, and brand pricing decisions.
Some of you tracking such models may find it practical to review financing options early and check your pre-approved new car loan offer once new prices are announced.
| Duty level | Price effect |
|---|---|
| Current structure | Highest prices |
| Reduced phase | Moderate relief |
| Final phase | Larger reduction |
Impact on domestic car manufacturers
Indian manufacturers are shielded from sudden impact because the policy includes limits and gradual changes. This gives them time to improve products and remain competitive.
In the longer term, lower duties on components could help local brands access better-quality parts, supporting overall vehicle improvement.
| Area | Expected effect |
|---|---|
| Short term | Minimal disruption |
| Medium term | Higher benchmarks |
| Parts sourcing | Better access |
| Product focus | Quality upgrade |
What buyers should know before purchasing
It is important to set realistic expectations. Imported cars will still cost more than locally built alternatives, even after duty cuts. The benefit lies in improved choice and fairer pricing, not bargain-level costs.
Buyers considering an imported model in the future should follow policy updates, compare ownership costs, and check your new car loan eligibility closer to the purchase timeline.
Why choose Bajaj Mall for your car purchase
For buyers exploring premium or imported cars, Bajaj Mall offers a simple way to compare models, variants, and prices in one place. You can browse cars by brand, budget, or features, which helps narrow down options without visiting multiple websites.
Once you shortlist a model, a car loan helps support your purchase with practical benefits such as:
- Financing of up to 100% of the car’s on-road price
- Access to car loan interest rates that remain competitive
- Flexible repayment tenures ranging from 12 months to 96 months
- Minimal documentation and a streamlined approval process
To plan your monthly outgo with clarity, you can also use the car loan EMI calculator and estimate instalments in advance. Bajaj Mall simplifies car discovery, while the financing journey stays clear and predictable.
If you are moving closer to a purchase decision, it may help to check your pre-approved new car loan offer and proceed at a pace that suits your needs.
