India to slash tariffs on cars to 40% in trade deal with EU, sources say

India plans to slash tariffs on cars imported from the European Union ‌to 40% from as high as 110%, sources said, in the biggest opening yet of ​the country’s vast market as the two sides close in on a free trade pact that could come as early as Tuesday (January 27, 2026).

Prime Minister Narendra Modi’s Government has agreed to immediately reduce the tax on a limited number of cars from the 27-nation bloc with an import price of more than 15,000 euros ($17,739), two sources briefed on the talks told Reuters.