This Is Why Your Dream Car Costs a Fortune in India

Ever seen the price tag on a luxury car in India and wondered if it’s too much? You’re not wrong. A comparison reveals that cars like the Toyota Land Cruiser, which costs around ₹2 crore in India, is available for as little as ₹30 lakh in Dubai — a staggering 80% price difference for the same model.

According to investment banker Sarthak Ahuja, the price disparities across global markets are largely driven by India’s high taxation structure on imported vehicles.

Luxury Cars in India: A Tax-Heavy Price Tag

Ahuja explains that the Indian government imposes a complex and heavy tax regime on imported luxury cars:

• Import duties: 60% to 100%
• GST: 28%
• Cess: Up to 22% (depending on engine capacity and vehicle type)
• State road taxes: Vary but are usually high

“Effectively, 45% of a luxury car’s on-road price in India is just tax,” Ahuja says.

This combination of levies can double the price of cars when compared to international markets.

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Dubai vs India: A Tale of Two Price Tags

In Dubai, minimal import duties and bulk procurement make luxury vehicles significantly cheaper. For example:

• Toyota Fortuner: ₹50 lakh in India vs ₹35 lakh in Dubai
• BMW X5: ₹1 crore in India vs ₹75 lakh in Dubai
• Land Cruiser: ₹2 crore in India vs ₹30 lakh in Dubai

These prices make Dubai a luxury car hub for high-end buyers globally.

How the US Compares

Even in the US, where cars are domestically assembled or imported with far lower duties, the price gap is noticeable:

• BMW X5: Around $65,000 (~₹55 lakh) in the US vs ₹1 crore in India
• Range Rover Sport: ₹2 crore in India vs ₹80 lakh in the US

This means Indian buyers are often paying 50–100% more than their global counterparts.

Affordable Alternatives: Buy Indian, Save Big

Despite the bleak outlook for luxury car enthusiasts, there’s good news for buyers of Indian-made brands. Ahuja notes:

“If you’re looking at a Maruti, Tata, or Hyundai, you’re better off buying in India. They’re manufactured locally and priced competitively on a global scale.”