India-Germany FTA: Luxury Cars, Electronics to Get Cheaper, Boost for Trade

• India and Germany are discussing a Free Trade Agreement (FTA) to boost bilateral trade and investment.
• Germany is India's 8th largest trading partner, with bilateral trade reaching $33.4 billion in FY 2024-25.
• An FTA could significantly reduce tariffs (60-100% currently on luxury cars) making German imports like BMW, Mercedes, Audi, and electrical equipment 20-50% cheaper.
• India's exports to Germany include pharmaceuticals, textiles, automotive components; imports include aircraft, machinery, and luxury cars.
• Potential challenges include pressure on generic medicine prices due to patent demands and impact on Indian agriculture and domestic industries.

Why It Matters: An India-Germany FTA promises cheaper luxury goods and industrial machinery, but raises concerns for generic drugs and local industries.