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flag India-EU trade deal slashes EV tariffs, boosts luxury EV sales, and mandates local production.

flag It is anticipated that a proposed free trade agreement between India and the EU, which is scheduled to be announced on January 27, 2026, will reduce import taxes on European luxury EVs from 100% to 10–15%, potentially increasing sales in India's premium EV market. flag In order to safeguard India's manufacturing objectives, the agreement includes phased localization regulations requiring 25% domestic content by year three and 50% by year five. flag Budget EVs made locally won't be impacted, but European companies like Porsche, Mercedes-Benz, and BMW might increase production in India by using it as a hub for exports. flag Additionally, the agreement establishes advanced standards for software-defined manufacturing, battery passports, and digital value addition, which may increase cooperation by 15% to 25% and improve supply chain resilience.

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