New Delhi, Jan. 27 -- European cars like Mercedes-Benz, BMW, Audi, Ferrari, Lamborghini, Rolls-Royce, Bentley etc are set to become cheaper in India following the conclusion of the India-European Union Free Trade Agreement (FTA), announced at the 16th India-EU Summit on Tuesday.

Under the pact, India has agreed to a calibrated, quota-based liberalisation of the automobile sector, which will allow European carmakers to introduce their models in India, particularly in higher price segments, with reduced tariffs. Within a quota system, tariffs on EU cars will go down to 10 per cent over a period of time.

The government said the carefully crafted auto liberalisation package balances consumer interest with domestic manufacturing priorities, ...