The general consensus is that China is the workshop of the world, and the impact that Chinese cars are making on the German and wide Eurozone car industry is obvious. Job losses announced by VW Group are just the start. So what is the solution? The VDMA see value in a strategic alliance between India and the EU, although that carries risks over supply chains of course. Here’s the word;
India is emerging as an increasingly important partner for the German and European mechanical and plant engineering sectors. At the 15th VDMA Mechanical Engineering Summit in Pune, VDMA President Bertram Kawlath emphasised the growing strategic importance of cooperation between Europe and India.
“India and Europe can form one of the defining industrial partnerships of the coming decade,” said Kawlath. “India stands for dynamism, entrepreneurial energy and impressive industrial ambition. Europe stands for technological leadership, outstanding engineering and decades of industrial experience. These strengths do not compete with one another, but complement each other.”
Around 600 VDMA member companies are currently active in India, manufacturing or developing products locally and providing customer service. India is becoming increasingly important to these companies not only as a sales market, but also as a location for investment, innovation and production. At the same time, many companies are seeking ways to diversify their supply chains and reduce their dependence on China. Against a backdrop of geopolitical tensions and growing economic uncertainties, India is thus also becoming increasingly important for the resilience of global value chains.
These positive prospects are reflected in companies’ expectations. In the latest VDMA business survey for India, 65 per cent of the local engineering firms surveyed anticipated rising order intake, whilst 56 per cent expected a further improvement in their business situation. At the same time, German machinery exports to India rose by 11 per cent to 2.2 billion euros in the first half of 2026.
Implement the free trade agreement swiftly now
The free trade agreement between the European Union and India is a key foundation for further deepening economic relations. It is intended to improve mutual market access, remove technical barriers to trade and create a more reliable framework for businesses. For the mechanical and plant engineering sector, the agreement also offers the prospect of significant tariff reductions. The VDMA is therefore calling on the EU and India to ensure that the free trade agreement enters into force as soon as possible.
“We need more trade, more investment, more technological cooperation and stronger industrial links,” said Kawlath in Pune. At the same time, he added, the partnership between Europe and India must be further deepened. This is particularly true at a time when economic interdependencies are taking on increasing geopolitical significance and companies are diversifying their international supply chains.
The VDMA also advocates gradually opening up public procurement markets between Europe and India to one another to a greater extent. This would create additional opportunities for companies on both sides and further deepen economic cooperation. “The challenges are real. Geopolitical tensions are rising, trade relations are becoming more complex and competition is intensifying. But none of these developments should lead us towards withdrawal or protectionism,” emphasised Kawlath. “Our response must be competitiveness. Our response must be innovation. And our response must be partnership.”
Be the first to comment