Luxury carmakers Mercedes-Benz, BMW, Skoda Auto Volkswagen, Audi, and Stellantis said the FTA’s full implication could be determined only after the fineprint was made available to them.
Mumbai/ New Delhi: European auto majors on Tuesday ruled out any reduction in prices in the foreseeable future, while welcoming the “landmark” free trade agreement (FTA) between India and the European Union.
India and Europe on Tuesday finalised an ambitious FTA, called the "mother of all deals", that came against the backdrop of a chaotic global environment and trade disruptions largely caused by US tariffs.
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Luxury carmakers Mercedes-Benz, BMW, Skoda Auto Volkswagen, Audi, and Stellantis termed the Indo-EU FTA a historic achievement for India, that would "drive technological innovation" in the automotive sector and boost the country's economy.
Mercedes-Benz India MD and CEO Santosh Iyer said the pact underlines the "rising relevance of the Indian economy at a global stage", but the full implication of the FTA could be determined only after the fineprint was made available to them.
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On the impact of the FTA on prices of vehicles, Iyer stated that the company’s focus is on maintaining price stability while relying on local manufacturing to manage costs and sustain sales. "With more than 90 per cent of Mercedes-Benz India's sales volume comprising 'Made in India' locally manufactured models, and only around 5 per cent of sales coming via CBU (Completely Built Unit) imports from the EU, we do not foresee any price reduction for Mercedes-Benz vehicles from the FTA, in the foreseeable future," he said.
BMW and Volkswagen also rule out price revisions
BMW and Skoda Auto Volkswagen welcomed the signing of the FTA and said the pact would propel the Indian economy, benefit the European Union and be a win-win for both regions.
They, too, ruled out any immediate revision in the pricing of the vehicles, saying it would be premature to draw conclusions on specific commercial or product strategies unless all details about the pact are available.
Hardeep Singh Brar, President and CEO, BMW Group India. said the group has always advocated free trade as it enhances fair market access, strengthens economic collaboration, leverages mutual strengths, and builds more resilient supply chains, especially at a time when such cooperation is crucial than ever before.
The proposed phased reduction of tariffs on cars and auto components has the potential to positively impact consumer confidence, enable greater product choice, and foster technological innovation and sustainable growth within the Indian automotive sector, particularly in future mobility, he said.
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On possibility of a price change, he said, "We will closely evaluate the detailed implementation roadmap, timelines and qualification criteria once the fine print of the agreement is available."
Similar to him, over 95 per cent of BMW's volumes in India come from locally manufactured 'Made in India' models, with fully imported vehicles accounting for only about 5 per cent of the total sales.
Audi India chief Balbir Singh Dillon said the company recognises the FTA's potential to deepen economic ties with one of the world's largest trading blocs.
He also said that Audi is positive that the EU FTA will create a stable and predictable environment for European automakers to invest, innovate, and better serve customers in the Indian market.
According to Skoda Auto Volkswagen India Pvt Ltd (SAVWIPL) Managing Director and CEO Piyush Arora, the pact is a win-win for both regions, with EU being one of India's largest trading partners.
SAVWIPL, which has six brands under its umbrella -- Skoda, Volkswagen, Audi, Porsche, Lamborghini and Bentley -- also said the greater tariff certainty and a more predictable trade framework will allow the company to evaluate the introduction of a wider range of European models for Indian customers.
European auto major Stellantis India hailed the signing of the FTA as a "landmark" moment and said the pact will serve as a significant accelerator for the company's long-term commitment to 'Make in India for the World'.
Moreover, reduced trade barriers will help enhance manufacturing competitiveness, expand export potential, and support seamless integration of its India operations into global supply chains, Stellantis India Chief Executive Officer and Managing Director Shailesh Hazela said in a statement.
PTI
Published: 27 Jan 2026, 10:25 pm IST
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