BMW Group India CEO Hardeep Singh Brar has urged the government to simplify and speed up import duty cuts under new free-trade agreements, warning that announcing gradual five-year reductions like the India-UK FTA, creates confusion and delays among car buyers anticipating lower prices.
The process of implementing import duty cuts under newly signed free-trade agreements (FTAs) with other countries should be simpler and quicker, said Hardeep Singh Brar, president and chief executive officer (CEO) of BMW Group India. Else, he added, it would create confusion among consumers who might delay vehicle purchases in anticipation of better prices.
India and the UK signed their FTA in July this year.
Under the deal, India will gradually reduce import duties on cars made in the UK -- which currently range between 70 per cent and 110 per cent -- to 10 per cent over five years, but only for a limited number of vehicles each year.
In the first year, duties on large petrol or diesel cars are expected to fall to around 30 per cent, declining further to 10 per cent by year five.
"I think the FTA with the UK should get implemented from next year. Under the FTA, within five years, the duty should come down to 10 per cent, which is very significant. It has a long-term positive impact, but it also creates confusion in the minds of consumers, who end up assuming that prices are going to come down immediately. They don't know that the import duty will come down to 10 per cent gradually over five years," Brar told Business Standard in an interview.
"If the price of a car is getting reduced 10 per cent every year, it creates hesitation in the minds of consumers on when to buy that car. The discussion with the EU for an FTA is also happening on similar lines... Therefore, rather than announcing everything upfront -- saying that import duty five years down the line would be 10 per cent -- the government should announce only the duty applicable for the next year, without specifying what will happen later,” he noted.
BMW Group India has taken steps to address such concerns.
In May, the company rolled out a price protection assurance for the Mini 3-Door Cooper S, promising customers that if import duties fall under the India-UK FTA within 180 days, the dealership will refund the difference between the invoiced price and the new ex-showroom price. Mini 3-Door Cooper S is built in the company's plant in Cowley, Oxfordshire in the UK.
Brar said, “The Indian consumer is very calculated. He or she keeps on calculating -- how much am I losing? Therefore, taxes have to be handled smartly, otherwise it can become a dampener for the industry.”
He added that consumers also become hesitant when they anticipate gradual import duty cuts, as it affects how they view the resale value of their vehicles over five to six years.
Brar said the recent GST rate cuts offer a good example of how such reductions should be implemented. “The GST rate cuts were announced, and for 37 days business was slow. Then activity picked up from September 22, when the new rates came into effect. But for FTAs, the timelines are much longer,” he added.
In the first nine months of 2025, BMW Group India sold 11,978 cars, recording 13 per cent year-on-year growth, driven by new launches, the recent GST rate cut, and strong festive demand.
Feature Presentation: Rajesh Alva/Rediff
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