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How the India-EU Trade Deal Could Quietly Reshape the Auto Industry

While immediate price relief for the buyer is unlikely, the India-EU FTA will help reshape long-term industry strategy, opening new markets and influencing localisation, sourcing and investment decisions.

By Prerna Lidhoo

12 Feb 2026

8195 Views

How the India-EU Trade Deal Could Quietly Reshape the Auto Industry

As soon as the India–EU free trade agreement was announced, the internet was filled with memes and hot takes centered on the assumption that European luxury cars were about to become meaningfully cheaper. Alas, luxury cars aren't going to suddenly drop from crore-plus price tags to ₹70 lakh. That said, the India-EU FTA can have meaningful implications for India’s auto industry.

Over the long term, the shift could reshape competitive dynamics in the country, while opening up a large opportunity for India’s auto component makers, particularly in the high-value segment. It is also likely to provide a boost to ...

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