The landmark India- EU FTA is now finally reality. India has now agreed to extend duty concessions to EU carmakers, similar to quota-based concessions already offered to UK manufacturers under the India-UK trade deal.
India-EU auto liberalisation to benefit consumers, open new opportunities for automakers
The Govt aims to offer calibrated and carefully crafted quota based auto liberalisation package that would “not only allow EU auto makers to introduce their models in India in higher price bands but also open the possibilities for Make in India and exports from India in future.”
“Indian consumers are likely to benefit from high tech products and greater competition. The reciprocal market access in EU market will also open up opportunities for India made automobiles to access EU market,” the government statement revealed in the latest PIB release.
Consumers and buyers will get the benefit as premium luxury European cars, such as BMW, Mercedes, Lamborghini, Porsche, and Audi, will become cheaper in the Indian market but what will be the impact of automakers.
India-EU FTA to lift luxury car demand, boost customer sentiment: Mercedes-Benz India
Speaking on the impact, Managing Director and Chief Executive Officer of Mercedes-Benz India, Santosh Iyer, believes that “a gradual tariff reduction on vehicles and fully liberalised automotive parts are strategically important decisions in the FTA for the automotive industry.”
According to Iywr, “The FTA opens up new avenues for customers with improved vehicle allocations, better availability of top-end global models for the 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.”
Too early to assess pricing impact of India-EU trade deal: Audi India
However, some other key PV makers took a more calibrated approach. Balbir Singh Dhillon, Brand Director of Audi India 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,” Dhillon said.
“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.” he added.
India-EU trade impact to be clearer in medium to long term: Skoda Auto Volkswagen India
Piyush Arora, MD and CEO of Skoda Auto Volkswagen India said that the trade deal will be a win-win for both regions.
“We believe this agreement will benefit customers in both regions. Greater tariff certainty and a more predictable trade framework will allow us to evaluate the introduction of a wider range of European models for Indian customers. Over time, this can support deeper technology transfer, capability building, and long-term investment in the Indian automotive ecosystem,” he added
Most automotive manufacturers adopted a cautious approach, given the actual timeline for implementation is spread out in a phased manner.
India has secured market access for more than 99% of Indian exports by trade value to the EU that also bolsters the ‘Make in India’ initiative.