US–India trade deal cuts luxury car tariffs but excludes electric vehicles

The United States and India signed a trade framework on February 6, 2026 that substantially lowers import costs for American luxury gasoline-powered cars and motorcycles while excluding electric vehicles (EVs) from tariff relief. India will cut duties on gasoline cars above 3,000cc from as high as 110% to 30% over ten years, and remove all import taxes on Harley-Davidson motorcycles. The US will reduce tariffs on goods from India from 50% to 18% in return; India has pledged to buy $500 billion of American goods and to scale back some oil purchases from Russia. EVs were deliberately left out: India will only offer special treatment to foreign EV makers that establish local manufacturing. The Indian 2026–27 budget supports building domestic battery and mineral processing capacity by removing import duties on key lithium-ion battery machinery and giving tax incentives for processing equipment. Officials framed the deal as prioritizing energy security and strategic alignment with the US while protecting India’s future-mobility sector. The pact takes effect after final signatures in March 2026. Short-term effects: cheaper imported high-end petrol cars and motorcycles in India, greater market access for US automakers like Ford and GM. Long-term implications: India’s protective stance on EV imports pushes global EV makers toward local production, accelerating onshore battery and supply-chain investment.