India-EU FTA will drive India's integration with global auto value chains: Siam, ACMA

Indian automobile manufacturers' body Siam and auto component makers' association ACMA on Tuesday said the free trade agreement reached between India and the European Union will enable increased choice for consumers in both regions besides strengthening India's integration with global automotive value chains.

"The FTA with EU will play a key role as India marches on towards 'Viksit Bharat'," said Shailesh Chandra, President of Society of Indian Automobile Manufacturers (Siam) and MD and CEO at Tata Motors Passenger Vehicles Ltd, said in a statement.

Chandra said while Siam was looking forward to specific details of the India-EU FTA with auto industry, "the calibrated approach to balance market access and domestic manufacturing, should give us a win-win between increased global participation on one hand and growth of the domestic auto industry with investments and employment on the other hand".


This will also enable increased choice for consumers in both regions, he said.

"The signing of the India- EU FTA is a timely and strategic step. For the auto-components industry, it has the potential to unlock new opportunities for exports, technology partnerships, and investment-led growth," said Vikrampati Singhania, President, Automotive Component Manufacturers Association of India (ACMA) and Vice Chairman and MD of JK Fenner (India).

As global OEMs and suppliers look to build resilient supply chains, a well-balanced and pragmatic FTA can position India as a reliable manufacturing and sourcing partner for Europe, while strengthening our long-standing industrial partnership, he added.

The European Union, according to ACMA, is India's largest trading partner for goods and a key market for the Indian auto components sector, accounting for nearly 30 per cent of India's component exports.

"Trade between India and the EU in auto components has remained broadly balanced, underlining the complementary strengths of the two regions," (ACMA) said in a statement.

According to ACMA, the auto components exports to the EU from India dropped to USD 6.75 billion in FY25 from USD 6.89 billion in FY24 while the EU's exports to India stood at USD 5.77 billion in the previous fiscal year from USD 5.4 billion in the year-ago period.

Meanwhile, Mahindra Group Group CEO and MD Dr Anish Shah said the FTA is a significant milestone as it provides the next wave of economic impetus for India, building on the strong foundation laid by a number of policy reforms and emphasised that "it ushers a generational opportunity for a value-led partnership between two natural allies in a volatile world".

Stating that the pact will provide "meaningful benefits" across multiple sectors, as it strikes a very good balance between opening the market while nurturing manufacturing in India, he said, "We see a huge positive for the auto sector as it provides duty-free access to European markets and will attract European OEMs to invest further in India."

He added that the pact is one of the most comprehensive ones and will boost industry growth across sectors like IT services, aerostructures, finance, agriculture, and renewable energy.