Why India-EU FTA won’t make Mercedes-Benz, BMW cars cheaper anytime soon?
Top European automakers including Mercedes-Benz, BMW, Audi, Skoda Auto Volkswagen and Stellantis hail the India-EU free trade agreement as a landmark move, but say vehicle prices are unlikely to fall anytime soon.
Auto majors Mercedes-Benz, BMW, Skoda Auto Volkswagen, Audi, and Stellantis on Tuesday welcomed the signing of the free trade agreement (FTA) between India and the European Union, calling it a “landmark event” that will drive technological innovation and boost India’s economy.
However, the luxury carmakers ruled out any reduction in vehicle prices in the foreseeable future.
Mercedes-Benz calls FTA a historic achievement
Terming the India-EU FTA a historic achievement, Mercedes-Benz India Managing Director and CEO Santosh Iyer said the agreement reiterates the rising relevance of the Indian economy on the global stage.
“The FTA is expected to strongly drive technological innovation and sustainable growth within the Indian automotive sector, with a sharp focus on future mobility. That said, the final implications of the agreement can only be determined once the fine print is available,” Iyer said.
He ruled out any immediate price reduction for Mercedes-Benz vehicles following the deal.
Explaining the limited impact on pricing, Iyer noted that more than 90 per cent of Mercedes-Benz India’s sales volume comes from locally manufactured ‘Made in India’ models, while only around 5 per cent of sales are through completely built unit (CBU) imports from the EU.
BMW and Skoda Auto Volkswagen see long-term benefits
BMW and Skoda Auto Volkswagen welcomed the FTA, stating that it would propel the Indian economy, benefit the European Union, and prove to be a win-win for both regions. Both companies said it would be premature to revise vehicle pricing until all details of the agreement are available.
BMW Group India President and CEO Hardeep Singh Brar called the pact a historic and ambitious milestone reflecting India’s growing strategic and economic relevance globally.
He said BMW has consistently advocated free trade as it enhances fair market access, strengthens economic collaboration, and builds more resilient supply chains. According to him, the proposed phased reduction of tariffs on cars and auto components has the potential to boost consumer confidence, increase product choice, and foster technological innovation and sustainable growth, particularly in future mobility.
On pricing, Brar said the company would closely evaluate the detailed implementation roadmap, timelines, and qualification criteria once the agreement’s fine print is available. He added that over 95 per cent of BMW’s volumes in India come from locally manufactured models, with fully imported vehicles accounting for only about 5 per cent of total sales.
Audi highlights trade and technology collaboration
Welcoming the agreement, Audi India head Balbir Singh Dhillon said the company recognises the FTA’s 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. Any implications for pricing and the market can only be assessed once the final terms are available and reviewed, including the implementation timeline,” Dhillon said.
He added that it would be premature to draw conclusions on specific commercial or product strategies at this stage and expressed optimism that the FTA would create a stable and predictable environment for European automakers in India.
Skoda Auto Volkswagen eyes wider model portfolio
Skoda Auto Volkswagen India Pvt Ltd (SAVWIPL) Managing Director and CEO Piyush Arora said the EU is one of India’s largest trading partners and that the FTA would propel the Indian economy while benefiting Europe.
SAVWIPL, which has six brands under its umbrella—Skoda, Volkswagen, Audi, Porsche, Lamborghini, and Bentley—said greater tariff certainty and a more predictable trade framework would allow the company to evaluate the introduction of a wider range of European models for Indian customers.
Stellantis calls pact a boost for ‘Make in India’
European auto major Stellantis India described the signing of the FTA as a landmark moment and said it would accelerate the company’s long-term commitment to the ‘Make in India for the World’ vision.
Stellantis India CEO and Managing Director Shailesh Hazela said reduced trade barriers would enhance manufacturing competitiveness, expand export potential, and support seamless integration of India operations into global supply chains.
“The conclusion of the EU-India Free Trade Agreement deepens economic cooperation and strengthens India’s position in the global value chain,” Hazela said.
India-EU seal ‘Mother of All Deals’
India and the European Union on Tuesday announced the conclusion of the ambitious FTA—billed as the “mother of all deals”—amid a challenging global environment marked by trade disruptions and tariff-related uncertainties.
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