A senior EU trade official said he hopes to finalize the India-European Union Free Trade Agreement by December 2025, positioning the auto component industry for significant gains as bilateral negotiations enter their decisive phase.
Speaking at the 65th Annual Convention of the Automotive Component Manufacturers Association of India (ACMA), European Commissioner for Trade and Economic Security Maroš Šefčovič declared: “We are now maximising the efforts to finalize trade negotiation by the end of this year for win-win scenarios for both parties.”
The announcement carries weight for India’s auto component sector, which currently exports $6.89 billion worth of components to Europe – making it the largest regional destination ahead of North America’s $6.19 billion, according to Invest India data.
Auto Industry Primed for Growth
India’s auto component exports reached $21.2 billion in financial year 2024, with Europe commanding a 32% share as of 2022, according to Statista data. The FTA could unlock this potential further as the industry targets $100 billion in exports by focusing on US and European markets, as reported in March 2025.
“The auto car components trade between EU and India share the high value investments and additional jobs… entire ecosystem and sharing equipment in manufacturing,” the official explained, highlighting the sector’s strategic importance.
The timing appears critical as India exported $77.5 billion worth of goods to the EU-27 in 2024, positioning the bloc as a major trade partner despite the absence of preferential access.
Economic Foundation
The negotiations build on substantial economic ties. “Over 6,000 EU companies operate in India… economic businesses have created more than 3 million jobs in India,” the official noted, emphasizing the existing foundation.
Official EU trade data shows the bloc as India’s second-largest trading partner with €120 billion in goods trade in 2024, representing 11.5% of India’s total trade. The official maintained that “in 2024, the EU was India’s largest trading partner.”
“We’ll be negotiating for quite some time… but I assure you that it has been in the best momentum,” the official acknowledged, adding with characteristic diplomacy: “We will not agree on most of the things… but I’m sure we will achieve success.”
Strategic Stakes Beyond Trade
The negotiations carry broader implications as both regions seek to diversify supply chains and reduce dependencies. “We are working [on] how to unlock further how to improve supply chain… how both can benefit,” the official explained.
The official drew a personal comparison when discussing India’s negotiating approach: “Your minister is fighting for you like a lion and I’m born in the land of lion… so we both understand each other very well.”
With negotiations still ongoing, the auto component industry watches closely as the year-end deadline could reshape one of the world’s most significant trade relationships, potentially transforming India’s position in global automotive supply chains.