Tariffs of EU Cars, Wines, Alcohol Duty to Drop
Chennai: India will reduce customs duties on European automobiles from 110 percent to 10 percent and customs duties on wines from 150 percent to 20 percent. Tariffs on aircraft, spacecraft, machinery, electrical equipment, medical supplies, precious stones and metals, chemicals, pharmaceuticals, plastics and iron and steel will be eliminated immediately or within a certain period of time. India will waive customs duties on European products worth €4 billion a year.
In the agreement document prepared by the European Union, it was stated that the European Union expects the agreement to double the EU’s exports of goods to India by 2032 by eliminating or reducing customs duties on 96.6 percent of the EU’s goods exports to India.
Tariffs on cars will be reduced from 110 percent to 10 percent and a quota of 2,50,000 vehicles will be implemented annually. Tariffs on auto parts will be eliminated entirely on auto parts in five to ten years. This will significantly reduce the prices of European luxury cars such as BMW, Mercedes-Benz and Volkswagen.
Tariffs of up to 44 percent on machinery, 22 percent on chemicals and 11 percent on pharmaceuticals will also be largely eliminated.
Tariffs of over 36 percent on average are imposed on EU exports of agri-food products, opening up a huge market for European farmers. Tariffs on wines in India will drop from 150 percent to 75 percent when it comes into force and then to 20 percent; Customs duties on olive oil, margarine, vegetable oils, fruit juices, non-alcoholic beer and sheep meat will be abolished, and customs duties of up to 50 percent will be abolished on processed agricultural products such as bread and confectionery. Tariffs on beer will decrease from 110 percent to 50 percent, on alcoholic beverages from 150 percent to 40 percent, on kiwis and pears with a quota from 33 percent to 10 percent, and on sausages and meat preparations from 110 percent to 50 percent.
Customs duties on pearls, precious stones and metals will drop from 22.5 percent to 0 percent for 20 percent products within five years. Tariffs on 90 percent of optical, medical and surgical equipment will be eliminated within 10 years. Aircraft and spacecraft tariffs, which are 11 percent, will be 0 percent in 10 years. Drug tariffs of 11 percent will be eliminated within five to seven years.
Regarding environmental regulations such as CBAM, the EU document stated that “the agreement enhances environmental protection and addresses climate change, protects workers’ rights, supports women’s empowerment, provides a platform for dialogue and cooperation on trade-related environmental and climate issues, and ensures effective implementation.”
Additionally, both economies will establish dedicated contact points to provide SMEs with relevant information about the FTA and assist them with any specific problems they may encounter when trying to use the provisions of the FTA. In addition, SMEs will particularly benefit from the advantages provided by the Agreement, such as tariff reductions, removal of regulatory obstacles, transparency, stability and predictability.
Europe’s sensitive agricultural sectors will be fully protected, as products such as beef, chicken, rice and sugar are excluded from the scope of liberalization in the agreement. All imports from India will continue to be required to comply with the EU’s strict health and food safety rules.
The agreement will give EU companies privileged access to the Indian services market, including key sectors such as financial services and shipping. It has the most ambitious commitments on financial services in any trade agreement, beyond what India has made to other partners.
The agreement ensures a high level of protection and enforcement of Intellectual Property (IP) rights, including copyright, trademarks, designs, trade secrets and plant variety rights.
