BMW Group India President and CEO Hardeep Singh Brar said on Monday.New Delhi: A reduction in customs duties on imported cars under the proposed India-EU free trade agreement (FTA) could help expand India’s luxury car market, which currently accounts for just 1 per cent of the overall passenger vehicle segment, BMW Group India President and Chief Executive Officer Hardeep Singh Brar said on Monday.
According to PTI, Brar said the India-EU FTA could prove to be a historic milestone for both sides by expanding bilateral trade and enabling deeper exchange of technology and innovation.
“From an automotive industry perspective, we hope the FTA will include balanced, win-win provisions that help stimulate demand in the luxury segment while strengthening supply chain integration, which is especially important in the current geopolitical context,” he said in a statement.
Possible impact of duty reduction
Highlighting the potential impact of duty reductions on completely built units (CBUs), Brar said lowering import tariffs would allow luxury carmakers to expand their portfolios in India. Currently, CBUs account for about 5 per cent of BMW Group India’s total sales.
“If customs duties on completely built units are reduced, it would help us broaden our product portfolio, introduce globally popular models and test new offerings in the Indian market,” he said.
Brar added that an increase in demand could eventually support higher levels of localisation over time. Given the relatively small size of the luxury car segment in India, he said such a move would not disrupt the mass-market passenger vehicle industry.
“Luxury vehicles form only about 1 per cent of the passenger vehicle market. This would benefit consumers without impacting mass-market players, making it a genuine win-win for both India and the EU,” Brar said.
India and the European Union are currently negotiating the free trade agreement, which is expected to cover goods, services and investment, including the automotive sector.
