NEW DELHI, April 20 (UPI) -- Imported luxury cars in India will likely be more affordable beginning in 2017 due to trade agreements with the European Union, government officials said.
Trade agreements under discussion include dropping customs duty for European cars to 30 percent, The Times of India reported Saturday.
That tariff mostly affects luxury brands because the lower sales volumes for high-priced cars generally means they are built overseas. Low volume sales for cars generally do not justify building assembly facilities for them in India.
Cars valued at $40,000 or higher are currently assessed a 100 percent customs levy, while those that cost less are assessed a 60 percent levy.
While the trade talks are between India and the European Union, the governments of South Korea and Japan have requested India to treat their products equally. A government source who wished to remain anonymous said India would likely agree to those requests.
However, Asian imports will not see the change as quickly as those from Europe, the newspaper said.
"It will surely expand the market, by at least double. By 2017, the per capita income as well as the domestic economy will expand from the current levels, and the infrastructure will also be better," said Pavan Shetty, the head of Lamborghini in India.
"The timing of the duty reduction will thus be perfect," he said.