FTAs are expected to create a new economic ecosystem in India that will boost demand for premium vehicles.The free trade agreements (FTAs) signed by India with the UK and the European Union should not be viewed merely as a means to reduce import duties on luxury cars, but as a broader catalyst for attracting foreign direct investment (FDI) and boosting manufacturing in India, said Balbir Singh Dhillon, Brand Director, Audi India.
“When there are nine FTAs that India has signed, I think over the next two, three, or five years, you will see a lot of FDI coming into India, a lot of manufacturing taking place, significant wealth creation, and growth in the stock market,” said Dhillon in an exclusive conversation with ANI.
Dhillon emphasised that while FTAs may eventually impact pricing and quotas for imported cars, their larger significance lies in transforming the Indian economy.
“So first and foremost, the FTA that was recently signed will take time to be implemented. My understanding is that it may take one and a half to two years before it is fully implemented. But the FTA should not be viewed only from the perspective that cars will have different import duties or that limited numbers of cars will enter the market,” he said.
He added that FTAs are expected to create a new economic ecosystem in India that will boost demand for premium vehicles by attracting foreign direct investment and encouraging local manufacturing.
According to Dhillon, this will strengthen the overall economy, and increased wealth will translate into higher consumption, including greater demand for luxury cars.
“FTA is more about wealth creation in India, which will lead to people buying more luxury goods, including luxury cars,” he said.
Highlighting India’s demographic advantage, Dhillon said that 65 per cent of the country’s population is below 35 years of age, which will play a key role in driving future growth.
He also pointed to positive government policies, including initiatives such as Make in India, support for startups, and manufacturing incentives, as factors contributing to economic expansion.
On the latest price hike announced by Audi for its vehicles in the country, Dhillon said currency fluctuations remain a key factor for the company.
He noted that while some cost pressures are absorbed, certain price increases are passed on to customers. This comes against the backdrop of Audi India announcing a 2 per cent price increase across its models.
On the outlook for the Indian auto sector, Dhillon said the industry is expected to continue growing, supported by infrastructure development, policy simplification, and measures such as GST reduction.
He added that Audi India remains focused on launching progressive and customer-centric products based on consumer feedback, with more launches expected in the coming months.
The company has recently launched the Audi SQ8 in India at an introductory price of ₹1.78 crore (ex-showroom).
