Delhi/Hyderabad, Sept 14 (Maxim News): The European Union will allow 2.5 lakh Indian-made passenger vehicles to enter its market annually at a concessional duty of 8 per cent under a bilateral free trade agreement, with the quota rising to 4 lakh vehicles, according to the draft text released by the EU.
The import duty concessions cover Indian-origin internal combustion engine (ICE) passenger cars and hybrid electric vehicles (HEVs) priced up to Euro 50,000 on a CIF (cost, insurance and freight) basis.
The quota-based concessional duty, or tariff rate quota (TRQ), will gradually be reduced to 6 per cent in the second year of implementation of the India-EU free trade agreement, the conclusion of which was announced on January 27 this year.
The duty will then come down to 4 per cent in the third year and 2 per cent in the fourth year, before becoming zero in the fifth year.
As per the text, the annual quota will increase gradually from 2.5 lakh vehicles in the first year to 4 lakh from the 10th year. Beyond this quota, the most favoured nation (MFN) duty will apply.
There are no quota-based concessions for cars priced above Euro 50,000. The duty on these vehicles will come down to zero per cent in the 10th year from 8 per cent in the first year of the pact, which is expected to be signed later this year and may come into force from next year.
For battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs) and passenger vehicles using any other technology except ICE and HEV, the pact provides a separate TRQ. (Maxim News)
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