India's Auto Industry Eyes Global Expansion With EU FTA Talks
The Indian automobile industry is gearing up for global expansion, with Trade Commissioner Maroš Šefčovič leading negotiations for a free trade agreement (FTA) with the European Union. This move comes as the industry transitions from a domestic powerhouse to a global export leader, boasting double-digit year-on-year growth in vehicle exports to regions like Africa, Latin America, Australia, and the Gulf.
To bridge the reported '15-19% handicap' and develop innovative, India-centric mobility solutions, the industry is increasing its R&D investment. The government is urging the sector to proactively address future challenges, including supply chain resilience and further boosting R&D. Key negotiations include the FTA with the EU, which holds significant potential for the Indian auto industry. The government is also pursuing ambitious FTAs with developed economies like the UK, Australia, and the UAE to secure deeper market access for the automobile and auto component sectors.
The industry is now producing world-class passenger vehicles and commercial vehicles that meet global aspirations. The auto component industry is exporting over $15 billion annually and is ready for global competition. The government is ready to partner with the industry to diversify sourcing and indigenise production of critical components like permanent magnets.
With the Indian automobile industry's global potential recognised, negotiations for FTAs are carefully calibrated to protect domestic industries while integrating with global supply chains. The industry's transition to a global export leader is expected to create innovative, India-centric mobility solutions and secure deeper market access through strategic partnerships and FTAs.
