No trade deal without ‘substantive commitment’ on cars from India: EU official
The emphasis on automobile exports to India comes as the European Union’s auto industry is facing a crisis.
The European Union (EU) has indicated that the grouping will not sign a trade agreement without “substantive” market access given by India for the sales of European made cars, an EU official who was part of the delegation visiting India said on Friday, following meetings with Indian government officials over the prospects of a free trade agreement.
This statement comes after Prime Minister Narendra Modi and European Commission President Ursula von der Leyen announced that India and the EU plan to sign a free trade agreement (FTA) this year, with von der Leyen describing 2025 as a “historic opportunity” and an “inflection point” in their relations.
“For the EU, cars, wines, and spirits are examples of sectors that are very important for European industry, and these are areas that we need to see reflected in a trade agreement between the European Union and India. I would even go as far as saying that without substantive commitments on cars, there will not be a trade agreement between the European Union and India,” the official said.
The emphasis on automobile exports to India comes as the European Union’s auto industry is facing a crisis. According to French automotive consultancy Inovev, annual European sales of sedans and SUVs have slumped from an average of 18 million units between 2017 and 2019 to between 13 and 15 million between 2020 and 2024. Moreover, in October 2024, Germany-based Volkswagen announced plans to close at least three of its German factories.
At the Trade and Technology Council (TTC) meeting on Friday, the official said that semiconductors were highlighted as an area requiring deeper and more focused discussions. “Our interest in semiconductors is very much aligned. But there are also some concerns regarding export controls, for example, in the United States, and how these controls may develop in the future,” the official said.
The EU official also said that both sides were keen to advance work on the India–Middle East–Europe Economic Corridor (IMEEC). “Both the EU and India are very interested in progressing work on this corridor between India and Europe. Even though the middle section is, of course, more gridlocked due to the known situation in the Middle East, there is agreement and understanding to work from both ends of the corridor—the European and Indian sides—and to really double down on this project,” the official said.
The official stated that agriculture remains a contentious topic between the two sides but that the European Union has “offensive” interests in the sector.
“Countries have sensitivities, just as we have sensitivities in agriculture. But the key thing here is that we should never throw the baby out with the bathwater. We have many interests—offensive interests—in agriculture. We have a strong trade surplus in this sector. We are very good at producing food and processed agricultural products, particularly from France, Italy, and essentially all our member states. So, we remain fully focused on securing a good deal for Europe,” the official said.
The European Union (EU) has indicated that the grouping will not sign a trade agreement without “substantive” market access given by India for the sales of European made cars, an EU official who was part of the delegation visiting India said on Friday, following meetings with Indian government officials over the prospects of a free trade agreement.
This statement comes after Prime Minister Narendra Modi and European Commission President Ursula von der Leyen announced that India and the EU plan to sign a free trade agreement (FTA) this year, with von der Leyen describing 2025 as a “historic opportunity” and an “inflection point” in their relations.
“For the EU, cars, wines, and spirits are examples of sectors that are very important for European industry, and these are areas that we need to see reflected in a trade agreement between the European Union and India. I would even go as far as saying that without substantive commitments on cars, there will not be a trade agreement between the European Union and India,” the official said.
The emphasis on automobile exports to India comes as the European Union’s auto industry is facing a crisis. According to French automotive consultancy Inovev, annual European sales of sedans and SUVs have slumped from an average of 18 million units between 2017 and 2019 to between 13 and 15 million between 2020 and 2024. Moreover, in October 2024, Germany-based Volkswagen announced plans to close at least three of its German factories.
At the Trade and Technology Council (TTC) meeting on Friday, the official said that semiconductors were highlighted as an area requiring deeper and more focused discussions. “Our interest in semiconductors is very much aligned. But there are also some concerns regarding export controls, for example, in the United States, and how these controls may develop in the future,” the official said.
The EU official also said that both sides were keen to advance work on the India–Middle East–Europe Economic Corridor (IMEEC). “Both the EU and India are very interested in progressing work on this corridor between India and Europe. Even though the middle section is, of course, more gridlocked due to the known situation in the Middle East, there is agreement and understanding to work from both ends of the corridor—the European and Indian sides—and to really double down on this project,” the official said.
The official stated that agriculture remains a contentious topic between the two sides but that the European Union has “offensive” interests in the sector.
“Countries have sensitivities, just as we have sensitivities in agriculture. But the key thing here is that we should never throw the baby out with the bathwater. We have many interests—offensive interests—in agriculture. We have a strong trade surplus in this sector. We are very good at producing food and processed agricultural products, particularly from France, Italy, and essentially all our member states. So, we remain fully focused on securing a good deal for Europe,” the official said.
