EU-India FTA: We have to get the details right

ACEA strongly supports concluding a trade deal with India. With a population of over 1.4 billion people and annual passenger car sales of just 4 million units, the room for significant market growth is clear. A truly ambitious deal would lift significant barriers to trade in both directions and provide a win for both parties at a very challenging moment.

But the EU should not seek to conclude a deal at any price. With the current state of negotiations, there is a real risk that the agreement will be restricted by quotas, market segmentation rules, residual tariffs, licensing systems, and various other mechanisms that will make the benefits of any deal hard to access. The parties need to cut the restrictions and be ambitious in granting meaningful quotas – particularly with long-term market size in mind – and in completely removing tariffs.

The deal is also not just about vehicle exports. European automotive manufacturers are already heavily invested in making vehicles in India and this will not change with the FTA. Indeed, the agreement can bring significant benefits in the form of full removal of tariffs on auto parts which will boost manufacturing interests in India as well as Europe.

“There seems to be a real political imperative to do a deal in the next days. We welcome the sense of urgency and commitment to intense negotiations, but are concerned that really important details might be overlooked in a rush to conclude”, said Jonathan O’Riordan, ACEA International Trade Director. “We need to keep in mind that the terms agreed now will be those that govern the agreement long into the future. We wish both parties success in finalising the agreement and that the result can provide deep and meaningful benefit to industry in both Europe and India.”

The European Automobile Manufacturers’ Association (ACEA) supports concluding EU-India FTA negotiations but the final deal needs to provide deep and meaningful access to automotive markets.