Daijiworld Media Network – New Delhi
New Delhi, May 15: Luxury carmaker BMW Group has said the proposed free trade agreement (FTA) between India and the European Union is unlikely to lead to any immediate expansion of its manufacturing operations in India, though it expects the pact to improve access to imported premium and performance vehicles.
Speaking on the possible impact of the agreement, BMW Group India President and CEO Hardeep Singh Brar said the company already has sufficient production capacity in the country and does not foresee fresh manufacturing investments solely because of the FTA.
“We already have enough capacity. We have a capacity of 50,000 units, so I don’t see any further capacity coming because of the FTA,” Brar said.
His remarks come at a time when India is pursuing multiple trade agreements aimed at positioning the country as a major manufacturing and export hub through lower tariffs and regulatory relaxations.
Brar stated that the biggest advantage for BMW under the India-EU FTA would likely be in the imported vehicle segment rather than locally produced models.
According to him, imported vehicles currently contribute around five per cent of BMW’s sales in India, and this share could increase to seven to eight per cent once the agreement comes into effect.
“It will give us access to some of the cars which we are not able to import today — some of the performance cars and some of the luxury cars at the top end,” he said.
He added that key details of the agreement, particularly regarding import quotas and pricing categories for automobiles, are still awaited.
“We will get further clarity once we know the quotas in the different price brackets, which is not clear today,” Brar noted.
He further said imported vehicles that are not manufactured in India are expected to benefit the most from the proposed trade pact.
On whether India could emerge as an export hub for BMW and other global automakers under the FTA framework, Brar said it was too early to make such assessments.
“Right now, we are looking at how we can utilise this for imports. Exports are still some time away,” he said.