India plans to reduce import tariffs on cars from the European Union under a proposed free trade agreement.

Tariffs on some imported cars will be cut to 40 percent from 110 percent.

The lower tariff will apply to a limited number of cars priced above 15,000 euros. The rate could be reduced further to 10 percent over time.

India and the European Union are expected to announce the conclusion of trade talks on Tuesday. The deal is aimed at boosting bilateral trade.

The tariff cuts are expected to benefit European carmakers such as Volkswagen, Mercedes-Benz, BMW, and Renault. India is the world’s third-largest car market after the United States and China.

At present, India imposes import duties of 70 percent to 110 percent on foreign cars. These rates have long drawn criticism from global automakers.

Under the proposal, India would allow imports of about 200,000 petrol and diesel cars a year at the reduced tariff. The quota could still change before a final agreement is signed.

Electric vehicles will not see any tariff reduction for the first five years. After five years, electric vehicles would be included in similar duty cuts.

India’s commerce ministry and the European Commission declined to comment on the reports.