Shares of India’s top carmakers dropped as much as 5 per cent on Tuesday after India and the European Union announced sharp tariff cuts on European car imports as part of a trade deal, potentially the most aggressive opening yet of a protected sector.
Mahindra and Mahindra’s stock fell as much as 5.1 per cent to its lowest since August 2025, leading losses on the Nifty auto index, which was down 2.1 per cent.
Maruti Suzuki India fell as much as 2.95 per cent and Tata Motors Passenger Vehicles was down 2.3 per cent.
New Delhi is slashing tariffs on cars to 10 per cent over five years from as high as 110 per cent with a quota of 250,000 vehicles a year, according to an EU statement.
This will likely benefit European automakers such as Volkswagen, Renault and Stellantis , as well as luxury brands Mercedes-Benz and BMW.
Indian manufacturers have long opposed such cuts, arguing they would discourage investment in local production by making imported vehicles more competitive.
Any reduction in prices of imported cars will have an impact on domestic carmakers, said Gaurav Vangaal, an analyst at S&P Global Mobility. India’s car market is maturing and we are continuously moving upward on average selling prices for SUVs, he added.
European carmakers currently hold a less than 4 per cent share of India’s 4.4-million-units-a-year car market, which is dominated by Japan’s Suzuki Motor and homegrown brands Mahindra and Tata. All three together hold two-thirds of the market share.
