NEW DELHI: Luxury cars are set to get dramatically cheaper. Not just the ones from Europe, but also from Japan and South Korea. Over the next few years the government is expected to slash customs duty on vehicles shipped from EU countries, which includes Germany, as well as Japan and South Korea, countries with whom India has free trade agreements (FTAs).
European car makers will get a head start as the government, beginning 2017, has offered to lower the customs duty to 30% on cars under the proposed trade & investment agreement with the EU. Japanese and Korean car makers are also expected to get the same benefit with a lag of a year or two, although a final decision on the issue is still awaited, sources in the government said.
Currently, cars with a landed cost of over $40,000 (around Rs 22 lakh) face 100% customs levy, and those below that pay 60% import duty. In case of EU, there is also a move to allow the import of at least 2.5 lakh cars at 10% duty between 2017 and 2021. (So the Mini Cooper's price could be halved.) Anything above the quota will come at 30% levy.
Source: timesofindia.indiatimes.com