Deep two-way sourcing, and a trade deal that just rewrote the tariff math on both sides.
Book a 30-minute callEuropean automotive OEMs and tier-1 suppliers already operate deep inside India's manufacturing base, and the new trade agreement adds a 250,000-unit annual quota for European vehicles at reduced tariffs, alongside zero duties on components where rules-of-origin processing requirements are met. That component clause matters more than the vehicle quota for most European manufacturers, it directly incentivises deeper supply relationships with Indian component specialists rather than shipping finished parts from Europe.
India exported $22.9 billion in automotive components in FY 2024-25, with Europe absorbing somewhere between a quarter and 29 percent of that depending on category, and India now has its own 625,000-unit annual quota for duty-free vehicle entry into the EU. Tariffs that historically ran as high as 110 percent on finished vehicles have been restructured entirely under the new agreement, though battery electric vehicles specifically remain excluded from the duty reductions for five years.
Tyres, safety glass and brake linings fall under mandatory BIS certification (IS 15627, IS 2553), separate from the broader Machinery and Electrical Equipment Safety OTR that covers industrial machinery more generally.
CE marking remains the baseline European standard for automotive components sold domestically in the EU; the new trade agreement changes tariff treatment, not the underlying product conformity requirements on either side.