Ever wondered why luxury cars in India come with a staggering price tag? A recent comparison reveals that Indian buyers pay up to 80% more for the same models sold abroad — largely due to the country’s high tax burden on imported vehicles.
While a Land Cruiser sells for nearly Rs 2 crore in India, the same model is priced at just Rs 30 lakh in Dubai. That’s a difference of Rs 1.7 crore — for the exact same car.
“The difference in pricing is staggering,” says investment banker Sarthak Ahuja. “A BMW X5 that costs Rs 1 crore in India is available for just around $65,000 (Rs 55 lakh) in the US — nearly half the price.”
The trend holds across several brands. A Range Rover Sport, which comes with a price tag of Rs 2 crore in India, would cost about Rs 80 lakh in the US — roughly 60% cheaper. In Dubai, the price gap is even more dramatic: a Toyota Fortuner that sells for Rs 50 lakh in India is available for Rs 35 lakh, and a BMW X5 goes for Rs 75 lakh — still 25% less than in India.
According to Ahuja, the primary reason is India’s complex and heavy tax regime. “Import duties on luxury cars range from 60% to 100%, GST adds another 28%, and then there’s a compensation cess and state-specific road taxes,” he explains. “Effectively, 45% of the car’s on-road price is just tax.”
By contrast, Dubai imposes minimal import duties. Final prices there are driven by demand, shipping logistics, and dealership strategies rather than layers of taxation.
That said, Indian buyers of mass-market brands like Maruti Suzuki, Tata, or Hyundai aren’t as affected. “These cars are manufactured in India, so they’re competitively priced even by global standards,” Ahuja adds.
Still, for anyone eyeing a high-end ride, the numbers reveal why luxury on four wheels comes at a much higher cost in India.