Shares of Mahindra and Mahindra fell as much as 5.1% to their lowest level since August 2025, leading losses on the Nifty auto index, which was down 2.2%. Hyundai Motor India shares fell 4.5%, while Maruti Suzuki India shares were down as much as 3%, and Tata Motors Passenger Vehicles lost 2% of its value.
India plans to cut tariffs on European Union car imports to 40% from as high as 110% as the two sides near a free trade pact that could be sealed as early as Tuesday, Reuters reported. The government has agreed to immediately reduce the tax on a limited number of cars with an import price of more than 15,000 euros ($17,739), the report said.
Lower import taxes would offer a lift to European automakers including Volkswagen, Renault and Stellantis, as well as luxury brands Mercedes-Benz and BMW.
Indian manufacturers have long opposed such cuts, arguing that they would discourage investment in local production by making imported vehicles more competitive.
European carmakers currently hold a less than 4% share of India’s 4.4 million units a year car market, which is dominated by Japan’s Suzuki Motor, as well as homegrown brands Mahindra and Tata, which together hold two thirds of the market.
Emkay Global analysts said if the India EU Free Trade Agreement is similar to the India UK FTA, duty revision would have minimal or no impact on Indian PV OEMs, as CBU imports are restricted to super luxury models priced between Rs 1 crore and Rs 1.5 crore.Premium PV OEMs like BMW, Mercedes and Audi already have assembly operations for over 70% of their volumes in India.
“A potential reduction in the around 8% import duty on motorcycles in the EU from India would be a positive for key two wheeler exporters like Bajaj Auto (KTM and Triumph) and TVS Motor (BMW and Norton), as EU markets levy country specific VAT on bike value and duty, amplifying effective landed cost,” Emkay said.
Also read: Kotak Mahindra Bank shares decline 4% after Q3 results. What should investors do?
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
Source link
