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This week's edition covers a milestone in the EU-India partnership, recent acquisitions of European and Japanese businesses by Indian counterparts, Airbus’ and ZF’s increased sourcing, and more must-know news.

Recap: I hope you enjoyed last week’s guest article, when fellow Riser Wolfgang Bergthaler went deep into “Why The Traditional Export Strategy Does Not Work Any Longer With India”. My key takeaway: localisation is necessary to secure customer acceptance and market share. Make in India will therefore outperform traditional export strategies, and will also provide the opportunity to make from India for the region and globally.

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This is what India’s Jindal Steel International offered for Germany’s 200 year old Thyssen-Krupp Steel Europe.

There have been many signs of improving relations between India and the EU this year. New announcements and further progress on the Free Trade Agreement (FTA) last week demonstrate that the EU’s strategic shift towards stronger ties with India is real, driven by geopolitical pressures and economic opportunities.

Last Wednesday, the EU Commission unveiled its “New Strategic EU-India Agenda”. Based on enhanced cooperation, both sides intend to improve prosperity and safety, elevating the EU-India relationship to the next level.

In the joint announcement, both sides highlight their intention to deepen collaboration across all levels. The key focus areas are organised around three strategic pillars:

An update to the first strategic agenda from 2004, the new agreement builds upon a strong foundation:

The announcement is on top of the ongoing negotiations for the upcoming India-EU FTA that are reportedly progressing well. The 13th round of negotiations were just concluded and round 14th are planned to be held in Brussels from October 6th - 10th. An agreement is targeted by the end of 2025 and has been widely supported by EU member states and the Indian government. Just last week, Denmark’s government reiterated its support for an early conclusion.

The New Strategic Agenda is a milestone for the Indo-European partnership and signals willingness to strengthen ties, especially in light of US-imposed tariffs on both countries and other geopolitical implications. Just over the past couple of weeks, US President Trump was reportedly pushing the EU to imply 100% tariffs on India (and China). The now announced agenda certainly shows that the EU is interested in a stronger partnership with India, and is hedging against further economic and geopolitical pressure at the same time.

Sources: European Commission, The Economic Times, Times of India, The Print

India is home to large and well funded conglomerates. With an ongoing fundraising boom, some of our predictions in issue 24 of India Rising continue to unfold: Indian businesses now have sufficient resources not only to protect and expand their domestic market share, but to acquire established European and Japanese companies.

A market's true maturity isn't measured solely by foreign investment inflows, but by domestic companies' ability to invest abroad. While Indian companies and Indian subsidiaries of multinationals have successfully raised substantial capital in recent years, they're increasingly deploying these proceeds for strategic Mergers & Acquisitions (M&A) activities.

Following Tata’s successful acquisition of the Italian truck manufacturer Iveco in a EUR 3.8 billion all cash deal some months ago, several other transaction were announced just last week:

M&A transactions involving Indian companies reached USD 41 billion in 2024 (as detailed in our last issue) and show no signs of slowing. Powered by successful fundraising efforts and a rapidly expanding domestic market, many Indian businesses are well-positioned to fuel their growth through strategic acquisitions abroad.

The pattern is clear: Indian companies are moving beyond being acquisition targets to becoming acquirers themselves, particularly targeting established businesses in Europe and Japan with valuable technology, market access, or industrial heritage. Expect this trend to accelerate as Indian conglomerates continue building global footprints.

Sources: Handelsblatt, Reuters, Tata Technologies, IndianWeb2

European industrial giants are doubling down on India as both a sourcing hub and growth market. Aerospace leader Airbus and German automotive supplier ZF are significantly expanding their Indian operations, driven by the same compelling factors: exceptional talent pools and strong market growth.

Airbus has steadily grown its investments in India since 2018 when it inaugurated its first Global Capability Centre (GCC) for technology developments. With more than 3,600 employees in the country today, Airbus sources over EUR 1 billion annually from over 100 suppliers across India and continues to invest. In a recent meeting with Ashwini Vaishnaw, India’s Union Minister of Electronics & Information Technology, Airbus India’s Managing Director Jürgen Westermeier also shared Airbus’ plans to open a new R&D Centre in Gujarat.

The German automotive supplier ZF has even more ambitious plans for its already substantial presence in India. The German leader already operates 19 production sites in the country and intends to quadruple sourcing to INR 25,000 crore (around EUR 2.8 billion) while expanding its supplier network from 700 to over 2,000 local partners. This represents a substantial leap from today's INR 6,500 crore (around EUR 722 million) sourcing volume. The primary growth driver will be internal combustion engine (ICE) components, a business vertical facing pressure in established European and American markets due to the electric vehicle transition..

Both companies exemplify a broader trend: India's evolution from a low-cost manufacturing destination to a strategic partner in technological development and a massive consumer market. European businesses are increasingly building domestic capacity in India not just to access cheap labor, but to tap into engineering talent and capture market share in one of the world's fastest-growing economies.

While some European SMEs have already adopted this approach, I expect a growing number of established European businesses will need to follow suit to remain competitive and participate meaningfully in India's economic expansion. Those who don't risk being left behind as India becomes increasingly central to global supply chains and innovation networks.

Sources: The Economic Times, AutocarPro

German broadcasting unit Deutsche Welle recently discussed how US imposed tariffs and other implications could lead to closer ties between Germany and India.

While this is from May, it is still of relevance today and recent developments provide evidence as to why closer ties are important for both regions.

Your random facts and stories about India and the Indo-European friendship.

This week: The importance of the EU-India Strategic Partnership from 2004.

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