India stands at a crossroads in its global trade ambitions. As pressure mounts from the United States and the European Union to slash tariffs on imported automobiles, the nation must walk a tight-rope between liberalisation and safeguarding its domestic industry. The temptation to play ball for a broader trade deal is real ~ but so are the risks of derailing years of hard-fought industrial progress. Currently, India imposes some of the highest car import duties in the world, aimed at encour – ag ing local manufacturing and nurturing home-grown brands. These tariffs have created an ecosystem that has not only attracted global players to “Make in India” but also allowed domestic manufacturers to scale up and compete.

The call now to reduce these tariffs to a mere 10 per cent ~ from well over 100 per cent ~ represents a seismic shift. While this could unlock greater access to premium vehicles and potentially drive short-term consumer benefits, the long-term cost to India’s industrial sovereignty may be steep. Both Washington and Brussels see India as an attractive, high-growth market with untapped potential. But their insistence on near-zero tariffs, especially for sectors like electric vehicles, risks undercut – ting Indian manufacturers who have made significant investments in local R&D and capacity building.

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These companies are not just assembling cars ~ they are laying the foundation for a future-ready auto industry that can compete globally in sustainable mobility. A phased reduction in tariffs, if considered, must be done strategically and on India’s own terms. Domestic firms need time to absorb competitive shocks and prepare for a more open marketplace. Any transition should be gradual, structured, and linked to reciprocal market access or technology transfer from trade partners. Tariff liberalisation cannot be a one-way street. Furthermore, the conversation around electric vehicles deserves special attention. The sector is still in its infancy in India, and prematurely opening the floodgates to foreign imports could smother innovation at home. The government must resist the urge to offer concessions that compromise the very industries it aims to champion through flagship initiatives and green mobility missions.

Trade negotiations must also consider employment and the wider economic ecosystem. India’s automotive sector supports millions of direct and indirect jobs, from factory workers and engineers to suppliers and service providers. Abrupt policy shifts driven by external pressure could result in job losses and economic dislocation, with ripple effects extending far beyond the showroom floor. The human cost of hasty trade-offs must not be ignored. This moment demands clarity of vision. It is not just about cheaper imports or sealing a trade deal ~ it is about defining what kind of industrial future India wants. Do we want to remain a consumption market for foreign goods, or emerge as a manufacturing powerhouse with a strong domestic core? India’s position at the negotiating table must reflect its aspirations, not just its anxieties. Strategic patience, firm red lines, and a commitment to domestic value creation should guide its approach.