European Carmakers Warn Against “Restricted” India-EU Trade Deal

European Carmakers Warn Against “Restricted” India-EU Trade Deal

New Delhi, 22 January 2026:As the India-European Union (EU) free trade agreement nears completion, the European Automobile Manufacturers’ Association (ACEA) has cautioned that the current negotiation path could lead to a “restricted” deal dominated by quotas, licences, and residual tariffs, limiting the benefits for automakers on both sides.

ACEA, representing 17 major European carmakers including BMW, Mercedes-Benz, Jaguar Land Rover, and Toyota Europe, stressed that the full removal of tariffs on auto components would provide the most meaningful boost to manufacturing and trade between India and Europe.

“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 other mechanisms,” ACEA said.

The association highlighted the need for ambitious, long-term market access, particularly for auto components, noting that European manufacturers are already heavily invested in India.

The timing is critical as both sides aim to announce the deal at the India-EU summit on 27 January in New Delhi. ACEA urged negotiators to balance urgency with careful attention to details that will shape long-term trade relations, emphasizing that a robust automotive chapter is key to mutual growth.