M&M

April 6 (Reuters) - India’s auto dealers warned of possible supply disruptions in the near term, from the West Asia conflict, even as Indian retail vehicle sales rose 25.28% in March, closing the financial year on a strong note on sustained momentum from tax cuts that improved affordability, the Federation of Automobile Dealers Associations (FADA) said on Monday.

Passenger vehicle sales rose 21.48% year-over-year in March, while two-wheeler sales rose 28.68% and commercial vehicle sales rose 15.12%, FADA said.

(Reporting by Meenakshi Maidas in Bengaluru)

((Meenakshi.Maidas@thomsonreuters.com; +91 8921483410;))

April 2 (Reuters) - Mahindra and Mahindra Ltd MAHM.NS:

• MAHINDRA & MAHINDRA- ANNOUNCED INCREASE IN PRICES OF UP TO 2.5% FOR ICE SUV AND CV RANGE WITH AN AVERAGE HIKE OF 1.6% ACROSS PORTFOLIO

• MAHINDRA & MAHINDRA- PRICE INCREASE, EFFECTIVE 6 APRIL 2026, IS ATTRIBUTED TO A COMBINATION OF COST ESCALATIONS.

Source text: [ID:]

Further company coverage: MAHM.NS

((Reuters.Briefs@thomsonreuters.com;))

Repeats to additional subscribers, with no change to text

By Aditi Shah

NEW DELHI, March 26 (Reuters) - India has asked automakers and parts suppliers to tighten production schedules to conserve fuel amid fears of shortages caused by disrupted oil and gas imports from the Gulf due to the Iran war, a government memo seen by Reuters shows.

The heavy industries ministry has also urged companies to shift factory operations from oil-based fuels to electricity and to use recycled aluminium or alternative materials as shortages and costs rise, according to the March 25 advisory.

For India, one of the world's largest oil and gas importers, the advisory underscores the government's mounting concern over the conflict and its disruption to energy flows, supply chains and availability of raw materials.

India's ministry of heavy industries did not immediately respond to a request for comment.

The government has already prioritised use of gas for households over industries, which get only about 80% of their average needs.

Some parts suppliers to India's leading carmakers like Maruti Suzuki MRTI.NS, Tata Motors TAMO.NS and Mahindra MAHM.NS are already reporting a shortage of gas to power operations at a time when vehicle sales are booming.

The ministry wants the sector to do more.

"Wherever technically feasible, a transition from oil-based fuels to electricity may be considered. Further, production schedules may be optimised to minimise idle and standby fuel consumption," the ministry said in its note.

The government wants companies to use recycled aluminium where possible and explore the use of alternative materials for packaging and other non-critical applications to reduce "demand pressure" amid shortages which are already affecting beer makers.

"I don't know how much we can change in the factory, but the takeaway is that this war is going to go on for a long time and we should be prepared," said an executive at an Indian carmaker.

(Reporting by Aditi Shah, Editing by William Maclean)

((aditi.shah@tr.com; +91-11-4954 8023, +91-11-3015 8023; Reuters Messaging: twitter: @aditishahsays))

By Aditi Shah

NEW DELHI, March 26 (Reuters) - India has asked automakers and parts suppliers to tighten production schedules to conserve fuel amid fears of shortages caused by disrupted oil and gas imports from the Gulf due to the Iran war, a government memo seen by Reuters shows.

The heavy industries ministry has also urged companies to shift factory operations from oil-based fuels to electricity and to use recycled aluminium or alternative materials as shortages and costs rise, according to the March 25 advisory.

For India, one of the world's largest oil and gas importers, the advisory underscores the government's mounting concern over the conflict and its disruption to energy flows, supply chains and availability of raw materials.

India's ministry of heavy industries did not immediately respond to a request for comment.

The government has already prioritised use of gas for households over industries, which get only about 80% of their average needs.

Some parts suppliers to India's leading carmakers like Maruti Suzuki MRTI.NS, Tata Motors TAMO.NS and Mahindra MAHM.NS are already reporting a shortage of gas to power operations at a time when vehicle sales are booming.

The ministry wants the sector to do more.

"Wherever technically feasible, a transition from oil-based fuels to electricity may be considered. Further, production schedules may be optimised to minimise idle and standby fuel consumption," the ministry said in its note.

The government wants companies to use recycled aluminium where possible and explore the use of alternative materials for packaging and other non-critical applications to reduce "demand pressure" amid shortages which are already affecting beer makers.

"I don't know how much we can change in the factory, but the takeaway is that this war is going to go on for a long time and we should be prepared," said an executive at an Indian carmaker.

(Reporting by Aditi Shah, Editing by William Maclean)

((aditi.shah@tr.com; +91-11-4954 8023, +91-11-3015 8023; Reuters Messaging: twitter: @aditishahsays))

By Aditi Shah

NEW DELHI, March 19 (Reuters) - India's automakers and parts suppliers are bracing for production slowdowns and assembly-line disruptions as the Iran conflict chokes gas availability, threatening growth in the world's third-largest car market.

Some parts suppliers to India's leading carmakers like Maruti Suzuki, Tata Motors and Mahindra are already reporting a shortage of gas to power operations, an early sign that supply chain issues are developing, according to two dozen executives at car companies, part makers and dealers.

The disruption comes at a time when India's car demand is soaring to record levels, with sales expected to cross 4.5 million units in the current fiscal year to March 31, leaving little excess inventory with manufacturers and dealers.

"At this point in time it is about survival. First and foremost we need to ensure production continues. The buffer stocks will not last long," said a senior executive with a leading carmaker.

INDIA MOST EXPOSED TO WEST ASIA CONFLICT

India relies heavily on the Middle East for energy supplies, importing 50% of its natural gas needs mostly from Qatar, which has been forced to shut its refinery after a wave of Iranian attacks.

Shipments of oil and gas through the Strait of Hormuz have also tanked after Iranian attacks on vessels.

While India is working to secure gas from the U.S., Norway and Russia, the government has prioritised supplies for homes over factories. In auto sector plants, the fuel is critical to high-heat processes like forging and casting, and in the paint shop.

Suppliers Reuters spoke to in India's western and northern car manufacturing belts said production will be managed until end-March. But the stress in the system is showing, with at least four executives saying Tata and Mahindra are operating some factories below capacity.

Mahindra said in a statement that the company has not lost any production this month versus its "plan to date", while a spokesperson for Tata Motors said operations at its plants are "near normal".

Tata said it is working with suppliers to ensure continuity and optimising production where required.

Small and medium manufacturing units, which form the car industry's backbone, are most vulnerable, as they rely more on gas and are unable to switch to other sources quickly.

Kirloskar Ferrous KRFI.BO, a supplier of iron castings, told an Indian stock exchange this week it has stopped some production at a factory in Western India "until further notice".

Metal producer Hindalco HALC.NS declared force majeure to some of its customers last week, warning them of potential disruptions amid gas shortages.

Both companies count Mahindra as a customer. Mahindra did not offer a direct comment about the two suppliers, but said its teams are working on the supply chain and taking action as needed.

CARMAKERS YET TO OFFICIALLY CUT PRODUCTION SCHEDULES

Automakers are operating in a state of high-alert diplomacy with their suppliers to keep assembly lines moving, and have not officially cut production schedules yet.

"We have received some information about challenges in energy supply for our in-house and our suppliers' production operations," said Rahul Bharti, senior executive officer for corporate affairs at Maruti MRTI.NS, India's biggest carmaker.

"As of now, our operations are running as per plan," he told Reuters.

S&P Global Mobility has already begun slashing its India outlook, now forecasting 6.3% growth in light vehicle production for 2026, down from 7.4% projected before the war.

"Depending on when the conflict ends, we may need to further revise the forecast," said S&P's Gaurav Vangaal.

(Reporting by Aditi Shah; Editing by Jan Harvey)

((aditi.shah@tr.com; +91-11-4954 8023, +91-11-3015 8023; Reuters Messaging: twitter: @aditishahsays))

March 13 (Reuters) - India's domestic car dispatches to dealers rose for the fifth straight month in February, data from an industry body showed on Friday, helped by tax cuts that have lowered prices across most models.

"While the month of March has festive drivers... the recent conflict in West Asia remains a concern... could impact the manufacturing processes and exports," Rajesh Menon, Director General of Society of Indian Automobile Manufacturers (SIAM), said.

Here are some key details:

• Passenger vehicle dispatches jumped 10.6% to 417,705 units in February, compared with 377,689 units a year earlier.

• Tax reductions continue to fuel growth, extending momentum for fifth consecutive month.

• In September 2025, India slashed taxes on larger SUVs to 40% as an additional levy was dropped and on small cars and two-wheelers to 18% from 28%, helping support demand across segments.

• Vehicle sales picked up during the ongoing wedding season, supported by strong bookings, inventory build-up and new model launches.

• Domestic demand is expected to remain strong, though exports could soften on reduced shipments to Africa and the Middle East, analysts added.

• SIAM warns the ongoing Middle East crisis could hit production and exports if supply chains are disrupted.

• A shortage of gas - crucial for paint shops and component manufacturing - may affect production, analysts said, though they expect only near-term impact on Indian manufacturers due to inventory buffers.

• Domestic demand to stay robust but exports could weaken due to reduced shipments to Africa and the Middle East- Axis Capital

• India, the world's third-biggest car market, has an auto industry that accounts for 7.1% of its GDP.

• Tax cut-driven growth is likely to sustain for several quarters, a dealer's body said last week.

(Reporting by Meenakshi Maidas and Urvi Dugar in Bengaluru)

((Meenakshi.Maidas@thomsonreuters.com; +91 8921483410;))

By Gabriel Araujo

SAO PAULO, March 9 (Reuters) - Brazilian planemaker Embraer EMBJ3.SA could roll out E175-E1 regional jets from a potential production line in India as early as 2028, but the plan hinges on orders for at least 200 aircraft, CEO Francisco Gomes Neto told Reuters on Friday.

Earlier this year, Embraer and India's Adani Group had announced a memorandum of understanding to establish a final assembly line for the Brazilian firm's first-generation jetliners in India.

Such a move would mark a significant win for the Indian government, which has urged planemakers to build jets locally, and a geographic shift for Embraer, which currently produces commercial jets only in Brazil.

"Of course, we will not start a significant investment without orders. That's the first point, we need the orders. And what we're saying is this: to set up an assembly line, we need at least 200 aircraft to be produced there," Gomes Neto said.

If orders are secured by the end of 2026, the company would be able to start delivering planes in 2028, he added.

"It's roughly 24 months, which we believe is enough to begin making it happen. They know that, it's clear to us," the CEO said.

Gomes Neto said Embraer has identified at least 1,800 Indian routes that could be operated by E1s – jets that seat up to 88 people and are essential to U.S. regional aviation but have lacked demand elsewhere in recent years.

The executive noted that a plant in India would help Embraer boost production while filling its hybrid line in Brazil with orders for the newer E2 family, which has seen strong global demand.

Embraer, which initially targeted reaching 100 commercial aircraft deliveries in a single year in 2028, now sees scope to hit the milestone in 2027, the CEO said.

SAUDI ARABIA NO LONGER A C-390 HOTSPOT

In addition to commercial aircraft, Embraer has also partnered in India with Mahindra on the C-390 military cargo jet, calling the country a "strategic market" for its defense unit.

Saudi Arabia, the European Union, and the United States also earned that label in 2024, but Gomes Neto said prospects have now dimmed for an order from the Middle Eastern country.

"It continues to be a business front, but it's not in the hotspot for us right now," he said, adding that Embraer is instead focusing on India and the United States.

Embraer had hoped to replace Saudi Arabia's aging fleet of Lockheed Martin's C-130. In 2023, when President Luiz Inacio Lula da Silva visited the country, it signed a deal with SAMI, which has the backing of Saudi public wealth fund PIF, to explore a potential C-390 assembly line there.

"We have a good product there, but I believe they had the vision of having a larger aircraft," Gomes Neto said. "It's still on our radar, but no longer in the hotspot."

(Reporting by Gabriel Araujo
Editing by Nick Zieminski)

((Gabriel.Araujo2@thomsonreuters.com; +55 11 5047-3352;))

Rewrites, adds details, background, auto body president comment

By Meenakshi Maidas and Yagnoseni Das

March 5 (Reuters) - India's retail vehicle sales jumped 25.6% in February, as last year's tax cuts and a pick-up in weddings drove demand for two-wheelers and passenger vehicles, the auto dealers' body said on Thursday.

Analysts had expected double‑digit year‑on‑year growth in February, supported by price cuts, new model launches and firm rural demand, after India cut taxes on vehicles last September to boost consumption in the wake of steep U.S. tariffs.

Two-wheeler sales jumped 25% from a year ago in February, while passenger vehicle sales climbed 26.1%, the Federation of Automobile Dealers Associations said, adding that demand was supported by weddings with enquiries rising across rural and urban markets.

The dealer body's president, C.S. Vigneshwar, told Reuters that growth is likely to sustain for several quarters, if not years, noting that the industry had always expected the impact of the tax cuts to be "seismic" rather than seasonal.

Over two-thirds of dealers surveyed by the association expect retail sales to grow in March, buoyed by festival-driven demand and fiscal year-end purchases. However, dealers have flagged supply constraints for some models.

Vigneshwar said that there has been no immediate impact on logistics for vehicles from the Middle East war.

Passenger vehicle inventory, or the average time a car remained on the showroom floor, fell for a fifth consecutive month to 27–29 days from 32-34 days in January.

(Reporting by Meenakshi Maidas and Yagnoseni Das Bengaluru; Editing by Eileen Soreng and Mrigank Dhaniwala)

((Meenakshi.Maidas@thomsonreuters.com; +91 8921483410;))

March 3 (Reuters) - Mahindra and Mahindra Ltd MAHM.NS:

• CLARIFICATION ON MEDIA REPORT ABOUT INDONESIA PUTS CO'S VEHICLE IMPORTS ON HOLD

• CO HAS NOT RECEIVED ANY COMMUNICATION FROM INDONESIA ABOUT SUSPENSION OF ORDER FOR SUPPLY OF VEHICLES

Source text: ID:nBSE45Xp1

Further company coverage: MAHM.NS

((Reuters.Briefs@thomsonreuters.com;))

Feb 20 (Reuters) - Gulf Oil Lubricants India Ltd GOLU.NS:

• RENEWAL OF MULTI-YEAR AGREEMENT WITH MAHINDRA AND MAHINDRA

Source text: ID:nBSEbRVKqQ

Further company coverage: GOLU.NS

((Reuters.Briefs@thomsonreuters.com;;))

PARIS, Feb 18 (Reuters) - French car parts maker Valeo VLOF.PA unveiled plans to increase its sales in India, with its new initiatives announced alongside President Emmanuel Macron's trip to India this week which is expected to yield new deals for French companies.

Valeo said it would be investing more than 200 million euros ($236.7 million) in the coming years to expand its presence in India and that these new investments were aimed at tripling Valeo's sales in India to around 700 million euros by 2028.

Valeo added it had been selected to supply electric powertrains for a range of vehicles under the 'Born Electric’ passenger vehicle platform of Indian company Mahindra & Mahindra MAHM.NS and that this strategic partnership had a total order value of close to $1 billion.

"India is a key pillar of Valeo's global growth and innovation roadmap, and we are committed to significantly expanding our engineering centers and industrial footprint," said Valeo CEO Christophe Perillat in a statement.

($1 = 0.8449 euros)

(Reporting by Gilles Guillaume; Editing by Sudip Kar-Gupta)

((sudip.kargupta@thomsonreuters.com;))

Feb 13 (Reuters) -

• INDIA AUTO INDUSTRY BODY SIAM - INDIA'S JAN TOTAL DOMESTIC PASSENGER VEHICLE SALES 4,49,616 UNITS

• SIAM - INDIA'S JAN 2-WHEELER SALES 19,25,603 UNITS

• SIAM - INDIA'S JAN 3-WHEELER SALES 75,725 UNITS

• SIAM: NEW BUDGET INITIATIVES, POLICY TAILWINDS EXPECTED TO DELIVER LONG-TERM BENEFITS, SUPPORT GROWTH IN MEDIUM TERM

((Reuters.Briefs@thomsonreuters.com;;))

Feb 11 (Reuters) - Mahindra and Mahindra Ltd MAHM.NS:

• MAHINDRA & MAHINDRA LTD EXEC SAYS EXPECT FULL-YEAR INDUSTRY-WIDE TRACTOR SALES TO GROW BETWEEN 22%-24% IN FY26

• MAHINDRA & MAHINDRA LTD EXEC SAYS DEMAND FOR CARS RIGHT NOW STRONGER THAN SUPPLY

• MAHINDRA & MAHINDRA LTD EXEC SAYS EXPECT TO ADD 3,000-4,000 UNITS A MONTH FOR ICE SUVS THROUGH DE-BOTTLENECKING INITIATIVES AT CHAKAN, NASHIK PLANTS

• MAHINDRA & MAHINDRA LTD EXEC SAYS EXPECT LEFT-HAND DRIVE VERSIONS OF OUR SUV MODELS BY 2028 FOR POTENTIAL EXPORTS TO EUROPE

Further company coverage: MAHM.NS

((Reuters.Briefs@thomsonreuters.com;))

Repeats February 6 story. No change to text.

By Aditi Shah

NEW DELHI, Feb 9 (Reuters) - India has scrapped a planned concession for small cars in upcoming fuel-efficiency rules after automakers including Tata Motors and Mahindra & Mahindra argued it would benefit only one company, a government document shows.

A September draft had proposed leniency for petrol cars weighing 909 kg (2,004 lb) or less - a carve-out widely seen as favouring Maruti Suzuki, which controls 95% of India's small‑car market.

India's Power Ministry has now removed that exemption and tightened other parameters, increasing pressure on all automakers to ramp up electric and hybrid car sales, according to the latest 41-page draft reviewed by Reuters.

The new rules curb over-compensation for vehicle weight, aim to level the field between light and heavy fleet manufacturers, and are designed to deliver real-world efficiency gains, the document said.

They introduce "a substantially steeper reduction pathway" for emissions, it added.

The power ministry did not respond to a request for comment.

PROMOTING ELECTRIC, HYBRID MODELS

Transport accounts for about 12% of India's energy use and is a major driver of petroleum imports and carbon emissions. Passenger vehicles make up nearly 90% of transport-related emissions, the document says.

Corporate Average Fuel Efficiency norms dictate permissible CO2 emissions across a manufacturer's fleet of passenger cars weighing less than 3,500 kg (7,716 lb). Updated every five years, they push automakers towards cleaner technologies including electrification, compressed natural gas and flex-fuel.

The new rules will apply from April 2027 for five years and are central to automakers' product and powertrain investment plans. It was not immediately clear when the rules will be finalised.

The September draft would have allowed fuel-consumption targets to rise faster with vehicle weight, easing compliance for makers of heavier cars such as Mahindra MAHM.NS, Tata TAMO.NS and Volkswagen VOWGp.DE, while tightening demands on lighter-fleet players such as Maruti MRTI.NS. That imbalance prompted the carve-out.

The revised plan reduces the extent to which heavier vehicles gain more relaxed targets.

"Manufacturers with heavier fleets ... are required to achieve stronger intrinsic efficiency improvements," the document said.

A credit system will reward companies that sell more EVs and plug-in hybrids, and pooling of fuel-consumption performance between companies will be allowed. Non-compliance will draw penalties of up to $550 per car.

The revised plan aims to cut average fleet emissions to about 100 grams/km over the five years to March 2032 from 114 grams/km. With credits, that could fall to as low as 76 grams/km if electric models reach 11% of total car sales by 2032.

(Reporting by Aditi Shah. Editing by Mark Potter)

((aditi.shah@tr.com; +91-11-4954 8023, +91-11-3015 8023; Reuters Messaging: twitter: @aditishahsays))

By Aditi Shah

NEW DELHI, Feb 6 (Reuters) - India has scrapped a planned concession for small cars in upcoming fuel-efficiency rules after automakers including Tata Motors and Mahindra & Mahindra argued it would benefit only one company, a government document shows.

A September draft had proposed leniency for petrol cars weighing 909 kg (2,004 lb) or less - a carve-out widely seen as favouring Maruti Suzuki, which controls 95% of India's small‑car market.

India's Power Ministry has now removed that exemption and tightened other parameters, increasing pressure on all automakers to ramp up electric and hybrid car sales, according to the latest 41-page draft reviewed by Reuters.

The new rules curb over-compensation for vehicle weight, aim to level the field between light and heavy fleet manufacturers, and are designed to deliver real-world efficiency gains, the document said.

They introduce "a substantially steeper reduction pathway" for emissions, it added.

The power ministry did not respond to a request for comment.

PROMOTING ELECTRIC, HYBRID MODELS

Transport accounts for about 12% of India's energy use and is a major driver of petroleum imports and carbon emissions. Passenger vehicles make up nearly 90% of transport-related emissions, the document says.

Corporate Average Fuel Efficiency norms dictate permissible CO2 emissions across a manufacturer's fleet of passenger cars weighing less than 3,500 kg (7,716 lb). Updated every five years, they push automakers towards cleaner technologies including electrification, compressed natural gas and flex-fuel.

The new rules will apply from April 2027 for five years and are central to automakers' product and powertrain investment plans. It was not immediately clear when the rules will be finalised.

The September draft would have allowed fuel-consumption targets to rise faster with vehicle weight, easing compliance for makers of heavier cars such as Mahindra MAHM.NS, Tata TAMO.NS and Volkswagen VOWGp.DE, while tightening demands on lighter-fleet players such as Maruti MRTI.NS. That imbalance prompted the carve-out.

The revised plan reduces the extent to which heavier vehicles gain more relaxed targets.

"Manufacturers with heavier fleets ... are required to achieve stronger intrinsic efficiency improvements," the document said.

A credit system will reward companies that sell more EVs and plug-in hybrids, and pooling of fuel-consumption performance between companies will be allowed. Non-compliance will draw penalties of up to $550 per car.

The revised plan aims to cut average fleet emissions to about 100 grams/km over the five years to March 2032 from 114 grams/km. With credits, that could fall to as low as 76 grams/km if electric models reach 11% of total car sales by 2032.

(Reporting by Aditi Shah. Editing by Mark Potter)

((aditi.shah@tr.com; +91-11-4954 8023, +91-11-3015 8023; Reuters Messaging: twitter: @aditishahsays))

Feb 1 (Reuters) - Mahindra and Mahindra Ltd MAHM.NS:

• MAHINDRA & MAHINDRA - AUTO SALES REACH 104,309 VEHICLES IN JANUARY

• MAHINDRA AND MAHINDRA - JAN UTILITY VEHICLES SALES 63,510 UNITS

• MAHINDRA AND MAHINDRA - JAN TRACTOR SALES 38,484 UNITS

• MAHINDRA & MAHINDRA - EXPECTATIONS OF GOVERNMENT SUPPORT, HIGHER ALLOCATION IN RURAL DEVELOPMENT IN BUDGET SHOULD POSITIVELY INFLUENCE IN COMING MONTHS

Source text: ID:nBSE5QJXb7

Further company coverage: MAHM.NS

((Reuters.Briefs@thomsonreuters.com;;))

By Shivangi Acharya and Aditi Shah

NEW DELHI, Jan 28 (Reuters) - India will immediately slash duties on high-end European cars to 30% from as high as 110% under its new trade deal with the EU, an official said, opening the tightly controlled market to luxury carmakers like BMW BMWG.DE and Mercedes-Benz MBGn.DE.

India and the European Union finalised a long-delayed deal on Tuesday that will cut tariffs on most goods and boost trade, at a time when governments worldwide are seeking to hedge against fickle U.S. policy and manage growing trade tensions.

India is the third-largest car market globally by sales after the United States and China. But its domestic auto industry has been among the world's most protected, with the government levying tariffs of between 70% and 110% on imported cars.

PRICIEST EUROPEAN CARS BENEFIT FROM BIGGEST DUTY CUTS

While India agreed under the deal to reduce import tariffs on cars above an import price of 15,000 euros ($17,963) to 10% over time, details of how the reductions will be implemented were not disclosed publicly.

A senior Indian government official, however, said New Delhi agreed to immediately reduce import duties on 100,000 traditional internal combustion engine cars annually split between three price categories.

European cars with an import price of 15,000 euros to 35,000 euros will see tariffs reduced to 35%, with annual imports capped at 34,000 units, said the official, who asked not to be named as the deal still requires legal vetting.

Cars priced 35,000 euros to 50,000 euros will be charged a 30% duty, with imports limited to 33,000 units a year, the official said. And 33,000 cars priced over 50,000 euros will also be subject to a reduced tariff of 30%.

The two highest price categories will see the largest tariff reductions. And the cap for all three categories combined will be raised to 160,000 units over 10 years, the official said.

India's trade ministry did not immediately respond to a request for comment on the details of the agreement.

MORE INDIANS DEVELOPING A TASTE FOR LUXURY

At a time when a growing number of Indians are developing a taste for opulence - from expensive homes to watches and even bathroom fittings - luxury cars made up less than 1% of the 4.4 million passenger vehicles sold in the country last year.

While executives have said that lower tariffs are unlikely to translate into immediate price cuts, they said the reductions will allow them to bring more vehicles to the market.

Lower import taxes should also be a boost for other European automakers such as Volkswagen VOWG.DE, Renault RENA.PA and Stellantis STLAM.MI, which have said increased trade will also result in increased technology transfer and shared supply chains.

LOCAL EV MANUFACTURERS TO REMAIN PROTECTED FOR NOW

India will, meanwhile, also cut import duties to 30% to 35% on a total of 20,000 European-made electric vehicles, the official said, but only five years after the trade deal is implemented.

Those tariff cuts will only apply to EVs priced above 20,000 euros in order to protect domestic players like Tata Motors TAMO.NS and Mahindra MAHM.NS.

Similar to combustion engines, the duty on EVs will reduce to 10% over five years and the annual import quota will rise to 90,000 units, the official added.

($1 = 0.8367 euros)

(Reporting Shivangi Acharya; Editing by Joe Bavier)

((shivangi.acharya@thomsonreuters.com))

Adds analyst comment in paragraph 7; updates shares

By Kashish Tandon and Chandini Monnappa

Jan 27 (Reuters) - Shares of India's top carmakers dropped as much as 5% on Tuesday after India and the European Union announced sharp tariff cuts on European car imports as part of a trade deal, potentially the most aggressive opening yet of a protected sector.

Mahindra and Mahindra's MAHM.NS stock fell as much as 5.1% to its lowest since August 2025, leading losses on the Nifty auto index .NIFTYAUTO, which was down 2.1%.

Maruti Suzuki India MRTI.NS fell as much as 2.95% and Tata Motors Passenger Vehicles TAMO.NS was down 2.3%.

New Delhi is slashing tariffs on cars to 10% over five years from as high as 110% with a quota of 250,000 vehicles a year, according to an EU statement.

This will likely benefit European automakers such as Volkswagen VOWG.DE, Renault RENA.PA and Stellantis STLAM.MI, as well as luxury brands Mercedes‑Benz MBGn.DE and BMW BMWG.DE.

Indian manufacturers have long opposed such cuts, arguing they would discourage investment in local production by making imported vehicles more competitive.

Any reduction in prices of imported cars will have an impact on domestic carmakers, said Gaurav Vangaal, an analyst at S&P Global Mobility. India's car market is maturing and we are continuously moving upward on average selling prices for SUVs, he added.

European carmakers currently hold a less than 4% share of India's 4.4-million-units-a-year car market, which is dominated by Japan's Suzuki Motor 7269.T and homegrown brands Mahindra and Tata. All three together hold two-thirds of the market share.

(Reporting by Chandini Monnappa and Kashish Tandon in Bengaluru; Editing by Sonia Cheema and Janane Venkatraman)

((Kashish.Tandon@thomsonreuters.com; 8800437922;))

Adds byline and dateline

By Aditi Shah and Philip Blenkinsop

NEW DELHI/BRUSSELS, Jan 25 (Reuters) - India plans to slash tariffs on cars imported from the European Union to 40% from as high as 110%, sources said, in the biggest opening yet of the country's vast market as the two sides close in on a free trade pact that could come as early as Tuesday.

Prime Minister Narendra Modi's government has agreed to immediately reduce the tax on a limited number of cars from the 27-nation bloc with an import price of more than 15,000 euros ($17,739), two sources briefed on the talks told Reuters.

This will be further lowered to 10% over time, they added, easing access to the Indian market for European automakers such as Volkswagen, Mercedes-Benz and BMW.

The sources declined to be identified as the talks are confidential and could be subject to last-minute changes. India's commerce ministry and the European Commission declined to comment.

PACT ALREADY DUBBED 'MOTHER OF ALL DEALS'

India and the EU are expected to announce on Tuesday the conclusion of protracted negotiations for the free trade pact, after which the two sides will finalise the details and ratify what is being called "the mother of all deals.

The pact could expand bilateral trade and lift Indian exports of goods such as textiles and jewellery, which have been hit by 50% U.S. tariffs since late August.

India is the world's third-largest car market by sales after the U.S. and China, but its domestic auto industry has been one of the most protected. New Delhi currently levies tariffs of 70% and 110% on imported cars, a level often criticised by executives, including Tesla chief Elon Musk.

New Delhi has proposed slashing import duties to 40% immediately for about 200,000 combustion-engine cars a year, one of the sources said, its most aggressive move yet to open up the sector. This quota could be subject to last-minute changes, the source added.

Battery electric vehicles will be excluded from import duty reductions for the first five years to protect investments by domestic players like Mahindra & Mahindra MAHM.NS and Tata Motors TAMO.NS in the nascent sector, the two sources said. After five years EVs will follow similar duty cuts.

MARKET CURRENTLY DOMINATED BY SUZUKI AND LOCAL MAKERS

Lower import taxes will be a boost for European automakers such as Volkswagen VOWG.DE, Renault RENA.PA and Stellantis STLAM.MI, as well as luxury players Mercedes-Benz MBGn.DE and BMW BMWG.DE which locally manufacture cars in India but have struggled to grow beyond a point in part due to high tariffs.

Lower taxes will allow carmakers to sell imported vehicles for a cheaper price and test the market with a broader portfolio before committing to manufacturing more cars locally, said one of the two sources.

European carmakers currently hold a less than 4% share of India's 4.4-million units a year car market, which is dominated by Japan's Suzuki Motor 7269.T as well as homegrown brands Mahindra and Tata that together hold two-thirds.

With the Indian market expected to grow to 6 million units a year by 2030, some companies are already lining up new investment.

Renault is making a comeback in India with a new strategy as it seeks growth outside Europe, where Chinese carmakers are making strong inroads, and Volkswagen Group is finalising its next leg of investment in India through its Skoda brand.

(Reporting by Aditi Shah and Philip Blenkinsop; Additional reporting by Lili Bayer in Brussels, with Shivangi Acharya in New Delhi; Editing by David Holmes)

((aditi.shah@tr.com; +91-11-4954 8023, +91-11-3015 8023; Reuters Messaging: twitter: @aditishahsays))

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By Gilles Guillaume and Aditi Shah

PARIS/NEW DELHI, Jan 23 (Reuters) - France's Renault RENA.PA is banking on the cult following of its Duster SUV to help revive its Indian business, bringing back a nameplate that had better brand-recognition than the automaker itself before regulatory change led to its demise.

The smallest by sales of so-called legacy automakers plans to elevate its line-up to more premium models under new CEO Francois Provost, who is tasked with growing Renault globally as Chinese rivals make inroads into its core European market.

Under the strategy, which has not previously been reported in detail, Renault will target wealthier rather than entry-level drivers as it seeks to recover market share that has dwindled over the past decade to less than 1% from a high of 4%.

It will begin on January 26 - India's Republic Day - by unveiling a Duster built to current safety and emission regulations as well as latest tastes and needs, Reuters has learned in interviews with Provost as well as five company sources and suppliers. That will be followed by a larger SUV like its Dacia Bigster and an electric vehicle, sources said.

"Previously, our strategy was to offer a car to all Indians. That is not my strategy," Provost, CEO since the summer when Renault lowered its profit forecasts, said in an interview. "I am targeting the middle class, which is growing in India and wants competitively priced but attractive cars."

Renault will also begin sourcing components in India for vehicles built in other markets, mainly South America, Provost said, akin to peers such as Stellantis STLAM.MI, Volkswagen VOWG.DE and Honda 7267.T.

The automaker now has full ownership of a factory in southern India that it once shared with Nissan and which has an annual capacity of 500,000. It will continue building cars for Nissan until 2032 and is evaluating the potential for export.

INDIA SET FOR GROWTH SURGE

The India revival is aimed at increasing sales beyond Europe. Last year Renault derived almost 70% of sales from the slow-growing region, made increasingly competitive with the influx of Chinese entrants such as EV leader BYD 002594.SZ.

Renault has launched a number of bestselling vehicles in recent years but profit margin pressure has weighed on its share price, dragging its valuation to around 10 billion euros ($11.69 billion), less than half that of Stellantis.

Last year, the French carmaker lifted non-European sales by nearly 12% by expanding in Latin America and South Korea. However, prospects in India could be even greater.

Sales in the world's third-largest car market are set to touch 6 million by 2030, up 36% from 2025, S&P Mobility data showed, with a rapid increase in demand for SUVs and premium vehicles. That forecast takes into account tough investment rules that shut out Chinese carmakers.

"Renault needs to solidify its market share in its high-growth markets," said Alexis Albert, equity fund manager at DNCA Finance, a Renault investor. Mature markets like Europe are unlikely to grow significantly, he said.

RISE OF THE SUV

Renault entered India in 2005 and had its first hit in 2012 as the competitively priced Duster SUV stood out in a market dominated by hatchbacks and sedans.

By 2016, it held 4% of the passenger vehicle market, making India one of its top 10 locations. However, it pulled the Duster almost five years ago, baulking at the cost of bringing it in line with new emissions standards.

In the meantime, India has seen a raft of SUVs from domestic makers such as Mahindra & Mahindra MAHM.NS and Tata Motors TAMO.NS, as well as South Korea's Hyundai Motor >.

The category accounts for more than half of the Indian market versus 10% when the Duster first launched, Renault said.

"This will be Renault's third attempt" at making a splash in India after the Duster and ultra-low-cost Kwid, said former Nissan COO Andy Palmer. "I think four times would be beyond everybody, because then everybody knows that you're not serious about doing it properly."

MAKE OR BREAK

Renault plans to at least double its India line-up, which consists of the Kwid and small cars Kiger and Triber.

Sales of the Duster are likely to begin in February and will be available with a hybrid powertrain for the first time in India, said one of the sources, who all declined to be identified as they were not authorised to speak with media.

Considering the faith placed in the Duster name, that SUV represents a make-or-break proposition, the person said.

Renault expects Duster production to reach 130,000 to 140,000 vehicles annually, three suppliers said, potentially more than tripling its 2025 India sales.

Like all automakers, Renault needs to update or introduce new models every six months to keep customers engaged, said S&P Global auto analyst Gaurav Vangaal. There is also the need for "an aggressive sales strategy supported by a robust customer follow-up process" to keep the momentum going, he said.

Under its broader international game plan, Renault said it will spend 3 billion euros by 2027 launching Renault-brand models in India, Latin America, South Korea, Turkey and North Africa. It declined to comment on how much it will commit only to India, a market where rival Suzuki 7269.T plans to invest $8 billion and Hyundai $6 billion.

Provost, a 57-year-old insider who previously ran operations in Russia, South Korea and China, said capturing even a small slice of the Indian market would be a game-changer for Renault.

"I would be delighted to achieve 5% of a 6 million car market," Provost said.

(Reporting by Gilles Guillaume and Aditi Shah; Additional reporting Nick Carey in London; Editing by Dominique Patton, David Dolan and Christopher Cushing)

((dominique.patton@thomsonreuters.com))