Renault has declared that the proposed India–European Union Free Trade Agreement (FTA) could substantially enhance its manufacturing and export strategy within India, with its Chennai facility poised to become a pivotal global center for vehicles and automotive components. As tariff barriers are anticipated to ease, the French automaker plans to capitalize on increased localization, expanded component exports, and new model production to boost volumes—a strategic move that may steer the company toward profitability.
Renault's Vision for a Win-Win Partnership
On the day the long-awaited India–EU FTA gained momentum, Fabrice Cambolive, Chief Growth Officer of the Renault Group and CEO of the Renault brand, shared insights with TOI. He emphasized, "An FTA between Europe and India can be a real win-win scenario. It facilitates two-way trade in vehicles and parts, and with our robust European foundation and expanding Indian presence, we are ideally positioned to reap the benefits."
Boosting Exports and Market Share
Cambolive, who visited India to launch the company's new Duster SUV—touted as one of the most significant automotive launches globally—predicted that the share of exports in India's current car production will increase from the current 20% once the agreement is operational. However, he noted that greater clarity on taxation pathways and implementation schedules is still pending.
As Renault aims to revive its sales and market share in India to 3–5% by 2030—a recovery from a decline to less than 1% from around 3% previously—the most immediate advantages from the FTA are likely to stem from auto components rather than finished vehicle imports. Venkatram Mamillapalle, Managing Director of Renault India, explained, "The agreement will significantly enhance the competitiveness of Indian-made components in Europe."
Benefits Across the Automotive Spectrum
He further elaborated that every original equipment manufacturer (OEM), regardless of whether they cater to high-end or mass-market segments, will gain from this development. Cars produced in Europe are expected to increasingly incorporate auto components manufactured in India, fostering a symbiotic trade relationship.
Renault's Strategic Initiatives and Future Portfolio
In the meantime, Renault has already established in-house production of several powertrain components, creating a viable pathway for boosting component exports once duties are reduced under the FTA. This move aligns with the company's broader strategy to leverage India's manufacturing capabilities.
Looking ahead, Cambolive highlighted that hybrid technology, advanced connectivity features, expanded engine options, and alternative fuels—including compressed natural gas (CNG)—will form the core of Renault's India portfolio. These innovations are set to drive the brand's growth and adaptation in the evolving automotive landscape.
The India-EU FTA, therefore, represents a transformative opportunity for Renault, not only to strengthen its foothold in India but also to position Chennai as a critical node in its global supply chain, ultimately contributing to economic growth and technological advancement in the region.
