India-EU FTA: Auto Industry Reacts To Landmark Trade Deal

India's market for luxury and performance cars is poised for a significant transformation following the official declaration of the India-European Union Free Trade Agreement (FTA). Under this agreement, India has consented to provide the EU with tariff reductions that are unique compared to those given to its other trade partners, which include a gradual lowering of import duties on vehicles.

This development is anticipated to have a direct impact on the pricing of fully imported European cars available in India, especially within the luxury and performance categories. Addressing the update, here's how the stakeholders in the auto industry reacted.

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Mercedes-Benz India:

Santosh Iyer, MD & CEO Mercedes-Benz India: " Mercedes-Benz welcomes the India-EU FTA as it will have a positive cascading effect on customer sentiments for the luxury segment, with boost in overall economic growth. A gradual tariff reduction on vehicles and fully liberalized automotive parts are strategically important decisions in the FTA for the automotive industry. The FTA opens up new avenues for customers with improved vehicle allocations, better availability of top-end global models for Indian market, faster access to latest technology and creating a stronger luxury car ecosystem. Mercedes-Benz will however continue to value add to customers with local production of world-class models from our manufacturing plant. "

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Federation of Automobile Dealers Associations

FADA President, CS Vigneshwar said, "The India-EU FTA is a milestone for the automotive sector, and we are proud that FADA could contribute meaningfully to its shaping. On the request of Hon'ble Commerce & Industry Minister Shri Piyush Goyal ji, FADA undertook a focused study-combining inputs from select European OEMs with rigorous data analysis-and submitted a detailed representation to the Ministry. We later briefed the Minister in person and engaged with the Secretary leading the India-EU negotiations.

The calibrated tariff glide path, TRQ safeguards and protection for India's EV trajectory announced today closely reflect the balanced recommendations we had placed on record. With over 95% of European OEM sales already locally manufactured, this FTA strengthens Make-in-India, expands consumer choice and opens reciprocal export opportunities for Indian OEMs.

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FADA remains committed to providing evidence-led, industry-grounded perspectives that support India's ambition to emerge as a global mobility hub."

Audi India

Balbir Singh Dhillon, Brand Director, Audi India, said, "We welcome the proposed Free Trade Agreement (FTA) between India and the European Union and recognise its potential to deepen economic ties with one of the world's largest trading blocs.

This constructive approach to trade could support the broader automotive ecosystem, including innovation, supply-chain efficiency, and technology collaboration.

That said, any implications for pricing & market can only be assessed once the final terms are available and carefully reviewed, including the timeframe of implementation. Until then, it would be premature to draw conclusions on specific commercial or product strategies.

We are positive that India-EU FTA will create a stable and predictable environment for European automakers to invest, innovate, and better serve Customers in India."

Stellantis India

Shailesh Hazela, CEO & Managing Director, Stellantis India: "The conclusion of the EU-India Free Trade Agreement is a landmark moment that deepens economic cooperation and strengthens India's position in the global value chain. At Stellantis India, we see this agreement as a significant accelerator for our long-term commitment to 'Make in India for the World.' Reduced trade barriers will help enhance manufacturing competitiveness, expand export potential, and support the seamless integration of our India operations into global supply chains.

For our customers in India, this development enables greater access to advanced technologies and the latest offerings from the Stellantis line-up. We appreciate the continued efforts of the Ministry of Commerce & Industry and industry bodies, including ACEA, CLEPA, and FEBI in shaping this forward-looking agreement that benefits India's automotive ecosystem and global partners alike."