US Considers Removing 25% Tariff on India, India to Slash EU Car Tariffs from 110% to 40%

US Treasury Secretary Scott Bessent stated at the World Economic Forum in Davos that the United States may remove the additional 25% tariff imposed on India. This tariff was initially implemented in response to India's oil imports from Russia.

Bessent said: "We put a 25 per cent tariff on India for buying Russian oil, and the Indian purchases by their refineries of Russian oil have collapsed. So that was a huge success. The tariffs are still on. I think there's a path to take them off." This indicates the tariff achieved its intended effect of reducing India's oil purchases from Russia. It suggests the US administration is considering removing these tariffs, although no formal decision has been made yet.

India Plans Major Cut in Auto Import Tariffs in EU Trade Deal

According to multiple informed sources, India plans to significantly reduce import duties on cars from the European Union from the current high of 110% to 40% in an upcoming free trade agreement, marking the most substantial opening of its vast automotive market to date. The agreement could be announced as early as Tuesday, January 27.

Two sources familiar with the negotiations told Reuters that the government led by Prime Minister Narendra Modi has agreed to immediately lower import duties to 40% on approximately 200,000 gasoline-powered cars from the 27 EU nations with an import value above €15,000, with the rate to be progressively reduced to 10% later. This represents the most radical opening measure so far, although the quota could still be adjusted in the final stages.

India and the EU are expected to announce the conclusion of their years-long free trade agreement negotiations on Tuesday, January 27, followed by finalizing details and proceeding with ratification.

India is the world's third-largest automobile market, after the United States and China, but its domestic auto industry has long been highly protected. Currently, New Delhi imposes high tariffs of 70% to 110% on imported cars.

Sources also indicated that purely electric vehicles will be excluded from the tariff reduction for the first five years to protect domestic Indian investments in this emerging sector.

Currently, European carmakers hold less than a 4% share in India's annual car market of about 4.4 million vehicles. The Indian market is dominated by Japan's Suzuki and domestic Indian brands, which together hold about two-thirds of the market share.