India’s luxury car market is facing an unusual slowdown: some prospective buyers are interested in purchasing expensive European vehicles but are postponing their decisions in anticipation of lower prices under the India-European Union Free Trade Agreement (FTA). The possibility of sharply reduced import duties has encouraged customers to wait for greater clarity before placing orders or completing purchases.
The hesitation is already affecting brands that rely on fully imported vehicles, including Porsche, Ferrari, Maserati and Lamborghini. According to industry executives cited by Moneycontrol, sales of some imported luxury cars have declined by 20–25% this year. The trend highlights how expectations surrounding a trade agreement can influence purchasing decisions even before the agreement becomes operational.
Porsche and Ferrari Face Delayed Purchases
Porsche has experienced a noticeable slowdown as customers wait to understand how the proposed tariff reductions could affect vehicle prices. An industry executive told Moneycontrol that the brand’s India sales during the first nine months of 2026 were down approximately 20% year-on-year.
The executive said customer interest remained high, but many prospective buyers were choosing to wait rather than place formal orders. Porsche had anticipated some of this hesitation and planned its vehicle inventory arrivals for the current year and 2027 accordingly.
The company’s recent performance also provides context. Porsche sold 730 vehicles in India in 2025, compared with 1,006 units in 2024, a decline of approximately 27%. This indicates that the brand was already experiencing pressure before the latest FTA-related uncertainty intensified.
Ferrari is facing a different version of the same problem. According to an industry executive quoted in the report, bookings have remained strong, but customers are increasingly reluctant to convert reservations into completed purchases.
The executive said Ferrari customers had been informed about a possible price correction of around 35% following the trade agreement. This is an industry expectation, not a confirmed price reduction announced by Ferrari.
Maserati has also indicated that demand remains strong compared with the previous year. However, industry executives believe sales could have been higher if the agreement had already been implemented.
Lamborghini is among the other European luxury brands facing uncertainty as customers consider whether waiting could make expensive imported models more affordable.
How the India-EU FTA Could Reduce Luxury Car Prices
The India-EU FTA, whose negotiations were concluded in January 2026, includes a phased reduction in import duties on eligible passenger vehicles manufactured in the European Union.
India currently imposes high import duties on completely built-up (CBU) vehicles. Depending on the vehicle category and applicable taxes, the effective import duty can reach approximately 110%. These costs significantly increase the final price of imported luxury cars.
Under the proposed agreement, eligible EU-origin vehicles will receive preferential tariff treatment, with duties gradually declining towards 10%.
The initial concessional rates will be approximately 30–35%, depending on the vehicle’s value. The reductions will take place over several years rather than immediately bringing all eligible vehicles to the lowest tariff level.
The agreement also establishes annual import quotas. European manufacturers will not be able to bring unlimited numbers of vehicles into India at the preferential rates.
Key provisions of the proposed vehicle tariff reductions
| FTA provision | Details |
|---|---|
| Existing peak import duty | Up to 110% |
| Initial concessional duty | Around 30–35% |
| Long-term concessional duty | 10% |
| First-year ICE and hybrid quota | 100,000 vehicles |
| Fifth-year ICE and hybrid quota | 130,000 vehicles |
| Tenth-year ICE and hybrid quota | 160,000 vehicles |
| Eligible vehicle price threshold | Above €15,000 |
| Separate EV quota | Begins from the fifth year |
The concessions will apply to qualifying EU-origin vehicles that meet the agreement’s conditions. Cars imported outside the prescribed quotas will not automatically receive the same preferential rates.
The agreement also provides separate treatment for electric vehicles, with a dedicated quota scheduled to begin from the fifth year of implementation.
These conditions matter particularly for luxury manufacturers because the final price reduction will depend on the vehicle’s origin, value, tariff category, quota availability and timing of import.
Why Buyers Are Expecting Significant Savings
Import duties form a substantial part of the cost of fully imported luxury vehicles. When the applicable tariff falls, manufacturers may have an opportunity to reduce showroom prices, potentially making certain models considerably more affordable.
For a vehicle priced at several crores of rupees, even a partial reduction in import-related costs could translate into savings worth tens of lakhs.
The India-UK trade agreement has already given Indian buyers an example of how preferential tariffs can influence luxury vehicle pricing.
Under the India-UK agreement, eligible British-made vehicles receive phased tariff concessions subject to conditions and quotas. Several luxury models have subsequently seen substantial price reductions.
According to Moneycontrol, the Range Rover SV was repriced at ₹3.5 crore from ₹4.25 crore, while the Range Rover SV Sport fell to ₹2.35 crore from ₹2.75 crore. Some Bentley models reportedly received reductions of around ₹1.5 crore, while certain Rolls-Royce models saw cuts exceeding ₹1 crore.
These reductions are linked to the UK agreement and should not be treated as a direct forecast of price cuts under the India-EU FTA. However, they have influenced expectations among customers considering European luxury vehicles.
Buyers are now wondering whether similar savings could become available on selected Porsche, Ferrari, Maserati and other European models once the new agreement takes effect.
FTA Uncertainty Is Also Affecting Carmakers’ India Plans
The impact extends beyond customers delaying purchases. European manufacturers considering new launches in India are also monitoring the agreement’s implementation details.
Stellantis-owned Alfa Romeo is evaluating a possible entry into the Indian market, but the company wants greater clarity about the trade agreement before deciding its next steps.
Santo Ficili, chief executive of Maserati and Alfa Romeo, told Moneycontrol during his October 30 visit to India that Alfa Romeo was being considered for the market as the brand prepares to renew its product portfolio.
Ficili said the company was discussing the Indian opportunity with Maserati’s existing operations and would assess how the FTA develops before making further decisions.
Lower import duties could make it easier for manufacturers to introduce niche, performance-oriented and premium models that may be commercially difficult to sell under India’s existing tariff structure.
However, the agreement’s benefits will not be identical across the luxury car industry. Brands with substantial local manufacturing or assembly operations may experience a different pricing impact from companies that depend heavily on fully imported vehicles.
The Bigger Picture
The current slowdown illustrates an important challenge associated with major trade agreements: the expectation of future savings can affect markets before the actual economic benefits arrive.
For customers planning to purchase expensive imported vehicles, postponing an order may appear financially sensible if the possibility of lower duties is credible. But the eventual savings are not guaranteed for every model, and the agreement’s implementation timeline remains a critical factor.
For manufacturers and dealerships, this creates an inventory and planning problem. Vehicles already imported under existing duty structures may become harder to sell if customers expect substantially lower prices on future shipments. Carmakers must balance current stock levels, future allocations and customer expectations without knowing exactly when the new tariff structure will become available.
The agreement could eventually expand the range of European vehicles available in India, but its effects will depend on how manufacturers use the quotas and whether tariff savings are passed on to customers.
Looking Ahead
The immediate focus for India’s luxury car industry will be the formal approval, signing and implementation of the India-EU FTA. Although negotiations concluded in January 2026, the agreement has not yet entered into force. The European Commission’s September proposal for formal approval decisions shows that further legal and institutional steps remain necessary. Until those processes are completed, buyers cannot assume that lower tariffs or revised showroom prices will arrive on a specific date.
For Porsche, Ferrari, Maserati and other European brands, the challenge is to maintain customer interest while managing a period of uncertainty. Some buyers may eventually return once tariff schedules and vehicle eligibility become clearer, while others may continue waiting for actual price announcements. The agreement could reshape India’s imported luxury car market over time, but its first visible effect is already being felt through delayed purchasing decisions.
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