India-EU FTA will generate wealth and prosperity in both partners: German Ambassador Philipp Ackermann

Ambassador Ackermann spoke to The Indian Express as part of a series of interviews with European Ambassadors on the FTA. The agreement is not just a trade deal but a political commitment to a rules-based international trade order, he said.

In a volatile global trade environment, how do you see the FTA holding up in the longer term as a stabilising factor in the bilateral economic relationship?

The EU-India Free Trade Agreement is not just a trade deal but a political commitment to a rules-based international trade order. It is also a strong signal from two democracies with almost 2 billion people [together] navigating an unpredictable world.

By locking in broad market access, transparent rules, and structured ways to resolve disputes, the European Union and India have chosen stability and predictability over policy whiplash and market uncertainty. Companies will have confidence to invest in supply chains that are less exposed to geopolitical shocks, while governments will gain a standing platform to manage disagreements on standards, technology, and sustainability before they escalate.

The FTA is not about risks, or geopolitical risks, alone. It is much more — it will generate wealth and prosperity in both the EU and India, and will offer chances for companies. With the passage of years, that predictability will compound, turning the relationship into a resilient and transformative economic partnership — one that weathers crises.

The economic impact will be profound. Some forecasts predict that the FTA could increase the EU’s GDP by around 0.1% per year. For India, the FTA could provide a decisive boost towards its own economic development.

In which specific area or sector will the FTA benefit Germany the most?

Everybody thinks of cars, of course, but frankly, I don’t think any one specific sector will stand out. What will matter is a company’s ability to anchor itself in the domestic market, localise production, and serve Indian consumers.

The FTA will also make India more attractive as a hub in global trade. To be a great exporter, you first have to be a great importer. Only by sourcing the components you need at competitive prices and by plugging into international value chains can companies become global players.

The real winners will be those companies that harness the Indian market, combine Indian and German know-how, and sell successfully to the world.

German ambassador Philipp Ackermann during Idea Exchange (Express Photo by Gajendra Yadav)

With tariffs on luxury cars cut from 110% to 10% under the 250,000-unit quota, how will German automakers balance increased CBU (Completely Built Unit) imports with existing ‘Make in India’ manufacturing hubs?

To succeed in the Indian market, companies need to localize production to fully benefit from the country’s cost advantages. Most consumers are not in the market for ultra-luxury products — manufacturers have to build what people actually want to buy.

I expect many European firms will use the FTA to expand Indian production not only for the domestic market but as export hubs serving global value chains. In that sense, the agreement strengthens India’s competitiveness compared with other production locations in the region.

Could the FTA accelerate the green hydrogen corridor between India and Germany?

Green hydrogen and green and sustainable technology are important pillars for future energy security as well as Germany’s bilateral relations with India. These are very tech-driven and environmental fields, which require research, investments, and international cooperation to create and develop markets.

We aim to deepen cooperation with India on green hydrogen. Due to abundant availability of solar energy, wind, and hydropower, India has great potential as one of the world’s leading producers of green hydrogen. The FTA will set a further supporting framework for this, creating favourable conditions for closer integration of our green hydrogen industries.

Dr Ackermann studied art history and economics, and received a doctorate in art history in 1993. He joined the German Foreign Service the same year, and served as political counsellor in New Delhi between 2007 and 2010. He returned to India as Ambassador in 2022. He heads to Beijing next month for his next assignment.

The first interview in this series was with the Ambassador of the EU to India Hervé Delphin.

NEXT IN THIS SERIES: Antonio Bartoli, Ambassador of Italy to India