EV tariffs take centre stage as India and the EU push to finalise a free trade pact, balancing market access, clean mobility, and strategic cooperation.
India and the European Union are moving closer to resolving differences on electric vehicles (EVs) in their ongoing free trade agreement (FTA) negotiations. Progress on this contentious issue could prove decisive for concluding a pact by the end of the year, officials familiar with the discussions said.
Commerce Minister Piyush Goyal is set to meet EU Trade and Economic Security Commissioner Maroš Šefčovič in New Delhi today. The meeting coincides with consultations involving a 28-member delegation from the EU’s Political and Security Committee, led by Ambassador Delphine Pronk.
Both sides hope to fast-track remaining issues if the talks achieve broad consensus.
According to a report by Mint, the EV issue has been among the toughest points in the negotiations. India currently levies steep tariffs on imported electric cars to encourage domestic manufacturing, while the EU is seeking lower duties to improve market access for its automakers.
Negotiators are exploring a framework similar to the India-UK agreement, where London offered duty-free entry for Indian-made EVs, and New Delhi agreed to cut tariffs on UK-made premium EVs gradually.
For India, securing tariff relief on labour-intensive exports such as textiles, gems, jewellery and engineering products remains a priority. In return, it is considering concessions on European wines, whisky and limited government procurement. Agricultural goods are also under discussion, though India has signalled that sensitive items such as dairy, edible oils and apples will remain protected.
Beyond market access, Indian negotiators have raised concerns about the EU’s Carbon Border Adjustment Mechanism (CBAM), warning of potential costs for domestic manufacturers, including EV producers. They are pressing for exemptions to safeguard local industry as the clean mobility transition gathers pace.
The 13th round of talks began in New Delhi on Monday. The EU, India’s second-largest trading partner, accounted for €120 billion in goods trade in 2024, or 11.5% of India’s total. India ranked ninth on the EU’s list of trading partners.
