Statement
VDA Statement on the EU-India Trade Agreement
VDA President Hildegard Müller:
"The successful conclusion of negotiations on a trade agreement between the EU and India sends a strong signal of decisive action! This is an important step for both regions, and especially for Germany as an export nation and for companies in the German automotive industry. It implements urgently needed improved market access in an increasingly protectionist global environment, even though not all obstacles are removed. The agreed gradual reduction of tariffs on vehicles to 10% for an initial quota of 250,000 vehicles, as well as the complete elimination of tariffs on car parts after 5 to 10 years, is particularly welcome. The agreement is an important step towards deepening cooperation, creates reliability, and underscores the partnership between the two regions. Now the EU must ratify the agreement swiftly. Not only the automotive industry in the EU is more dependent than ever on reliable cooperation with third countries and access to their markets.
India is a key partner, an important production location, and a crucial future market for the German automotive industry. Already the world's third-largest single market for passenger cars, it offers enormous potential. This agreement will at least partially reduce high import tariffs. Tariff reductions aligned with India's economic development will not only strengthen bilateral trade but also make reciprocal investments significantly more attractive.
EU trade agreements are of great importance for the entire European economy. For our industry, this means that around 70% of all jobs in the German automotive industry are secured by strong exports. This is the foundation of our prosperity. It is also a fact that only a strong and export-oriented industry with an internationally competitive production base will be able to master the major challenges of the transformation and thus make a decisive contribution to climate protection. Only with economic strength the EU can play a significant role on the world stage. Trade agreements provide a crucial basis for this."
Figures for editorial use if required:
- In 2025, approximately 4.5mn passenger cars were sold in the Indian market. This represents growth of around 5 percent compared to the previous year. This allowed the Indian market to solidify its position as the third-largest single market for passenger cars worldwide. For 2026, we expect further solid growth of 4%, reaching a volume of 4.7mn passenger cars. The recent tax cuts, particularly for smaller vehicles, should significantly stimulate the market.
- The Indian market for heavy commercial vehicles (>6t) grew by 8% in 2025. With 357,700 vehicles, the highest market volume since 2018 was achieved.
- Unfortunately, trade between India and Germany is not yet as strong as it could be. In 2024, the German automotive industry exported goods worth €1.115bn, of which €868mn were parts. Conversely, India supplied goods worth €589mn, of which €543mn were parts and accessories. The figures for 2025 are as follows: In the first three quarters of 2025, the German automotive industry exported goods worth €722mn to India, 18% less than in the same period of the previous year. Of this, €614mn were parts and accessories. Conversely, India supplied goods worth €462mn, which was 4% more than in the same period of the previous year. Of this, €425mn were parts and accessories.
- The potential remains high: India has 34.3 cars per 1,000 inhabitants. Considering the large population, this is already a significant number of vehicles in the country, but in terms of density, there is still considerable opportunity for growth compared to industrialized nations (e.g., compared to Germany (582.4 cars/1,000 inhabitants), the EU (585.3), the USA (877.6), or China (137.4)).
- The Indian government has set targets to increase the share of electric vehicles by 2030 to 30% for passenger cars, 70% for trucks and buses, and 80% for two- and three-wheelers. This also presents opportunities for German manufacturers.
Contact
Press Office
Benedikt Herzog-Wolbeck
Spokesperson with focus on economic policy & trade