The India-EU FTA will strongly drive technological innovation within the Indian automotive sector, Mercedes-Benz India MD and CEO Santosh Iyer said on Tuesday, while ruling out any price reduction of the company's vehicles in the foreseeable future after the deal.
Terming the Indo-EU FTA as a historic achievement for India, Iyer said the pact reiterates the "rising relevance of the Indian economy at a global stage".
"The FTA is also expected to strongly drive technological innovation and sustainable growth within the Indian automotive sector, with a sharp focus on future mobility. Saying that, the final implications of the FTA can only be determined once the fine print of the agreement is available to us," he added.
1 January 2026
Get the latest issue of Outlook Business
On the impact of the FTA on prices of vehicles, Iyer said, "With more than 90% of Mercedes-Benz India's sales volume comprising 'Made in India' locally manufactured models, and only around 5% of sales coming via CBU imports from the EU, we do not foresee any price reduction for Mercedes-Benz vehicles from the FTA, in the foreseeable future".
"We will continue our focus on value addition to customers through local production and competitive pricing, making world-class vehicles in India, for Indian customers." Mercedes-Benz India pointed out that the depreciating rupee against the Euro would continue to pose a challenge for European carmakers in India.
The rupee had depreciated by 19% in 2025 compared to the euro, which is expected to erode any benefit arising from lower duty import for CBUs in the next couple of years.
Stating that Mercedes-Benz has always advocated free trade, he said it brings down trade barriers, leverages the mutual strengths of global economies, and mitigates supply chain uncertainties.
"With the Indo-EU FTA, India's economic growth should get a strong boost as borders open up, presenting opportunities in new markets, fostering bilateral trade, and creating job opportunities," Iyer noted.
