Tariffs for automobiles and wines under the free trade treaty between India and the European Union it will be phased out and sensitive items such as dairy and agriculture will be excluded from the deal. The move is expected to help protect domestic industry while giving them the opportunity to expand, innovate and gain global competitiveness.

Under the recently concluded India-EU FTA, India will gradually reduce tariffs on cars from 110% to 10% on a quota of 250,000 vehicles a year Sources explained that there are three price categories for the cars and each will have a separate quota and a gradual reduction in fare.

ICE cars have been classified into three price categories: those between €15,000 and up to €35,000 will have a quota of 34,000 vehicles in the first year, and the rate will drop to 35% from 110% in the first year. The tariff for ICE cars in the price range of €35,000 to up to €50,000 and €50,000 and above will drop to 30% in the first year. While ICE cars in the €35,000 to €50,000 price range will have a quota of 33,000 vehicles in the first year, those priced at €50,000 and above will have a quota of 34,000 vehicles in the first year.

Cumulatively, the vehicle quota for ICE cars will be 1,00,000 in the first year of the FTA coming into operation and will rise to 1,60,000 in the 10th year of the FTA. The rate will drop to 10% in the fifth year.

Meanwhile, tariff concessions for electric vehicles will start from the fifth year and the vehicle quota of 90,000 units, which will drop to 40,000 in the tenth year.

CKD quota for 75,000 ICE vehicles with quota reduction from 16.5% to 8.25% has been decided in the TLC. In the 10th year, the CKD quota for ICE vehicles will be reduced to 50,000.

Official sources also explained that the reduction of EU wine duties from 130% to 20%-30% will take place over a period of seven years. No concession has been granted to wines priced below €2.50 in order to protect the interests of domestic wine producers and winegrowers.

On agriculture, the officials stressed that India will not open up dairy products in an FTA, adding that dairy and agricultural products such as rice, wheat, maize, soybeans, GM crops and pulses have been kept out of the FTA with the EU.

“We do not open sensitive agricultural items for any country in any FTA. Sometimes some items are opened on a case-by-case basis,” they detailed, adding that a small tariff quota may be given when there is a production deficit in India or when that item is not produced in the country.

In the EU FTA, in the case of apples, the EU will be allowed to export a maximum of 50,000 tonnes of apples to India, which will go up to 1 lakh tonnes in the tenth year of the agreement. This will have a duty of 20% and a minimum import price of Rs 80 per kg, giving a landed price of around Rs 96 per kg.