VW-owned companies Skoda and Audi will gain the most benefits from a proposed bilateral trade agreement between the European Union and the Indian government.

Under the new agreement, the Indian government has allowed for the import of a given number of cars at lesser import duty under tariff rate quote (TRQs).

According to the Times of India, the decision will impact on the local industry, which will have to focus on building small cars. “We will be left with manufacturing small cars only, while the technologically superior vehicles would be imported. Even the auto ancillaries will be left to do basic tasks,” the newspapes quoted an industry source.

The notified rate for import of automobiles applied on new cars is 60 percent, while the tariff for import is currently at 100%. Popular luxury models such as Audi’s A4, A6, A8 and Q7 are expected to be included in the reduction tariff. The BMW 7 Series is also expected to benefit from the proposed bilateral trade agreement.

Aside from the EU deal, South Korea and Japan will also receive comparable deductions from India under the earlier signed Free Trade Agreements.


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