Mercedes-Benz CEO Urges India to Lower Car Import Tariffs to Drive Market Growth

Ola Källenius, CEO of Mercedes-Benz Group, has made a strong appeal to the Indian government: reduce the country’s steep car import tariffs. He argues that with India’s automotive industry now robust and self-reliant in many respects, those high tariffs, meant originally to protect local players, may now be a hindrance rather than a help.

Speaking with The Media Källenius observed that India has evolved: it has built a strong ecosystem especially at the entry-level and volume market segments and no longer needs the same levels of protection. If tariff walls come down, he said, the European Union and other trade partners are likely to reciprocate in kind. Such mutual lowering of import duties, he believes, would help spark more economic activity, broaden consumer access, and open up opportunities for the luxury segment.

He pointed out that although India is among the largest passenger vehicle markets in the world with over 4.3 million passenger vehicles sold in FY25 luxury cars still make up only a tiny fraction, approximately 51,000 units. For a country of about 1.4 billion people, this represents a huge potential upside. Källenius specifically compared sales in India and Sweden: they both sell around 20,000 Mercedes-Benz cars, despite India’s vastly larger population.

Källenius also expressed confidence in India’s growth trajectory. Despite global economic ebbs and flows, he believes the country’s automotive sector is on a steady upward path and that the 21st century will feature India more prominently. Reduced tariffs could be an important policy lever to help unlock this future.