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This week's edition covers how TEPA boosts Indo-European ties, why the retail property market confirms growing F&B sector, Skoda’s new focus on India, and more must-know news.
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Number of the Week
80%
Most European businesses plan to scale up investments in India post FTA agreement.
Rise of the Week: The Start of TEPA Boosts Stronger Indo-European Ties
The Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA) got into effect on October 1st, 2025. Initial reactions show strongly growing interest by businesses in the EFTA countries Switzerland, Norway, Iceland and Liechtenstein and indicate the economic potential of the upcoming Free Trade Agreement (FTA) between India and the EU.
Image generated with Google Gemini
TEPA was signed in March 2024 and came now into effect at a time of US-imposed trade barriers and geopolitical uncertainties. The coincidentally well-timed agreement does spark strong economic interest and political support, and is founded on two key principles:
Cutting trade barriers: India will cut tariffs to 0% for 80-85% of products coming from EFTA countries, while 99% of Indian goods will be tariff-free.
Direct investment: Both sides agreed to invest USD 100 Billion in India and to create a million jobs over the next 15 years.
The principles of market access in exchange of investments are tied together. While some of the changes are not necessarily new (export of industrial goods from India to EFTA countries were already tax free), TEPA is an important step showing that India is about to liberalise and interested in stronger ties with Europe, an especially important signal in a world of growing economic uncertainties and trade instabilities.
It could not have come at a better moment. But at the same time, I do not want us to be perceived as an opportunistic country. Because the world now is in turmoil, all of a sudden we discovered our love and admiration for India -- it is not the case at all.
That's why I underlined that we wanted this for 16 years. We negotiated it for 16 years. We have had a long-standing relationship. We felt incredibly proud to be India's friend and partner.
Same as the EU-India FTA, TEPA has been under a long negotiation process until becoming effective. While aforementioned circumstances may wrongly imply a short-term decision because of that, geopolitical and trade issues certainly push Europe and India closer to each other and should help finalising the EU-India FTA.
The “massive interest to boost ties with India” by Swiss companies with TEPA now being effective, according to Budliger via The Economic Times, shows the wider potential the agreement unlocks for the Indo-European partnership. Switzerland is the largest trading partner of the EFTA countries and as previously reported, many European businesses are interested in increasing investments and collaboration with India, but are waiting for the FTA to conclude and provide clarity.
According to EU Ambassador to India Hervé Delphin, 80% of European businesses plan to scale up investments and jobs in India once the FTA is signed. Over 6,000 European businesses are already active in India according to a recent interview by Federation of European Business in India (FEBI).
In preparation of the next round of negotiations starting on October 6th, Delphin once again also highlighted the EU’s willingness to conclude the FTA by the end of the year. With some key elements still under negotiation, market experts however highlight the EU’s caution to do so under all circumstances.
Wolfgang Münchau, Director at Eurointelligence, raised some awareness of that in a recent interview with CNBC-TV18:
There’s a lot of hope, certainly in Germany, but in the rest of the EU as well, on a free trading relationship with India. …
Europe wants to participate in India’s economic boom, but this should not turn into a one-sided relationship.”
Münchau highlights the EUs recent experiences with China on large trade-surpluses and recent pressure from the US leaves them cautious to avoid a one-sided agreement with India. Something for the Indian decision makers to keep in mind.
The EU-India FTA could undoubtedly unlock stronger ties between both regions and provide the clarity European businesses need to take action. India as a new growth engine could provide stability to European businesses, in exchange for local investment and economic support for India. I think both sides understand what’s at stake and expect we will receive positive news in the next few weeks.
Sources: BBC, The Economic Times, CNBC-TV18
What Else is Rising?
India’s Retail Property Market Confirms Fast Growing F&B Sector
India is about to become the 2nd largest consumer market globally by 2030. A recent update on the retail property sector now shows that food & beverages (F&B) will be a cornerstone and market entry of international brands is picking up strongly.
With 6 million square feet of dedicated F&B space expected across the top seven cities by 2028, we anticipate rapid absorption within three to five years, driven by domestic and international operators seeking quality retail locations. This trend signals that the sector’s appetite for prime real estate extends beyond traditional mall formats, positioning F&B as a cornerstone of India’s evolving retail ecosystem.
As reported by Business Standard, the leading real estate consultancy JLL expects that the current development pipeline won’t cover the demand for F&B space if current leasing activity will continue at today’s high level. Out of the 30 million sqft total retail space under development in prime developments and malls by 2030, the around 6 million sqft F&B share will most likely only cover 38-40% of the total demand. Since 2023, 4 million sqft of F&B space was leased in the seven major cities Mumbai, Bengaluru, Delhi-NCR, Chennai, Hyderabad, Kolkata and Pune.
Several trends drive the demand:
Foreign investment: Over 20 international F&B brands have entered India since 2023.
Variety of cuisine: Larger multi-cuisine formats accounted for 41% of the leasing activity.
Flexibility and organic growth: New operators require higher flexibility in terms of location and growth potential. With a growing number of international brands entering India, this can mainly be catered by high street real estate and requires developers and landlords to adjust.
F&B is becoming a core pillar for Indian retail developments and accounts for up to 25% of the total retail space in a growing number of developments. It indicates a maturing and more broadly growing consumer market that other verticals in the retail sector will also benefit from. While we shared the strategic importance of India for French brands in issue 4 of India Rising, other European consumer brands should be ready to enter the market and in my opinion will consider this more strongly with agreement of the EU-India FTA.
Sources: Business Standard
Skoda Wants India To Become Its Second Pillar
India ranks as the third largest automotive market globally, yet European brands substantially lag their domestic and East Asian competitors in terms of market share (see India Rising Issue 7). Czech automaker Skoda, one of the leading European high volume manufacturers and part of the Volkswagen Group, now announced plans to make India its second core market to reduce dependency on Europe.
Skoda, we're very strong in Europe. We're now number three in Europe. Our growth path is humbly impressive... We're making good money. We're a very profitable company. We're one of the most profitable volume car manufacturers in the world, but we depend very much on Europe, and to depend just on one region is not a good idea.
So we want to develop a second pillar or second leg that we stand on, and the second leg, clearly, is India. That is why we are so serious about it, and that is why we have those plans to localise a whole platform.
Skoda intends to develop and make cars for India in India in order to increase market share. The company entered India back in 2001 and has recently announced doubling its sales in H1 2025 year-over-year to 36,000 units and targets to reach annual sales of 100,000 by 2026. An ambitious target, but still far less than the market leader Maruti Suzuki sells per month.
While being ranked third in terms of market share in Europe, Skoda only has a market share of 1% in India. This is equal to its parental company Volkswagen, and far behind its competitors. East Asian competitors and local leaders have manufactured market adjusted cars in India for many decades and continue to invest substantially in the country. As we recently shared, Suzuki announced plans to invest EUR 7.8 billion over the next 5 to 6 years and is transforming its local manufacturing hubs to support regional and even global exports moving forward.
With European automakers losing ground in the largest automotive market China, a reconsideration of their India strategy is required to take on market share in this future market.
Sources: Business Standard
Quick Risers
Germany’s development bank KfW signed EUR 150 million loan agreement to support the Government of India’s program for stronger electricity distribution networks. (Source: Indian Masterminds)
EY raises India’s GDP outlook to 6.7% thanks to GST reform. (Source: The Economic Times)
WeWork India IPOd and got listed on October 3rd. (Source: LiveMint)
Singapore’s Digilife Technologies executes business transformation from IT to construction materials by acquiring Indian Brimax AAC Products, confirming the fast growing materials sector in India. (Source: Minichart)
Danish Rockwool Group’s new plant in Gujarat remains on schedule and will be operational by mid-2026. (Sources: The Hindu)
The startup accelerator India Accelerator acquired Co-Working operator MySOHO to provide complete support for startups. (Source: The Economic Times)
US Tech company Apple expands India business with a new 37,549 sqft lease in Mumbai. (Source: Times of India)
Spotlight: Nine Famous National Parks in India
India is home to breathtaking nature and The Economic Times’ recent overview of nine famous national parks shares where you can experience it.
Curiosity Corner
Your random facts and stories about India and the Indo-European friendship.
This week: Europe’s direct communication style vs. India’s indirectness.
A key distinction in global business lies in the contrast between direct European and indirect Indian communication styles. European business culture typically values a low-context approach: messages are explicit, efficient, and a 'no' is stated plainly to ensure clarity. The focus is on the task at hand, and facts often speak louder than relationships. In stark contrast, Indian communication is high-context, prioritising the preservation of harmony and personal rapport over bluntness. Here, building trust is a prerequisite for business, and a direct 'no' is often seen as impolite. Instead, you might hear phrases like “I’ll try my best” or “Let me see,” which requires one to read between the lines.
Successfully navigating this cultural divide requires adaptation and observation. For European professionals, it means investing time in relationship-building and learning to interpret the subtle, unspoken cues. For their Indian counterparts, it may mean being more direct when dealing with global partners to ensure absolute clarity. Understanding that one style values directness for efficiency while the other uses indirectness to maintain harmony is the first step toward fostering successful cross-cultural partnerships.
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