India 2026: The free trade agreement has opened the door—are you ready to walk through it?
Why the EU-India Agreement and Geopolitical Shifts Are Now Forcing Small and Medium-Sized Businesses to Take Action.
For a long time, India was the land of big promises and small steps. Too complex, too bureaucratic, too far away—that was the verdict of many decision-makers at German SMEs when it came to entering the Indian market. Perhaps that’s your view, too?
That is currently undergoing a fundamental change.
In its latest issue dated May 18, 2026, the Handelsblatt examined how German companies are venturing into India—and why this moment is no coincidence. Our Managing Director, Mike D. Batra, shares his assessment of current market dynamics. Also featured among the companies profiled is our client Flottweg, a Bavarian machinery manufacturer that is currently establishing its 13th international location in India.
You can read the full article here in the Handelsblatt: “How Small and Medium-Sized Businesses Benefit from New Free Trade Agreements.”
We’d like to put this topic into context from our perspective—because we’re witnessing this change every day.
The timing is no coincidence
Fragile supply chains, geopolitical conflicts in the Middle East, U.S. tariff policies, and growing uncertainties in established trade relationships: The pressure on European companies to diversify their dependencies is greater than it has been in a long time. At the same time, in January 2026, the EU sealed the long-awaited free trade agreement with India. Two forces pointing in the same direction.
For us at Dr. Wamser + Batra, this comes as no surprise—and apparently not for the editorial staff of the Handelsblatt either, who interviewed Managing Director Mike D. Batra for his assessment of current market dynamics:
“Companies that had previously set India aside as an interesting but overly complex market are now coming forward with clear mandates. The free trade agreement serves not only as a catalyst for entry but also as a strategic impetus for deeper market penetration.”
Mike Batra,
, Executive Management
The sectors showing the strongest demand are primarily mechanical and plant engineering, specialty chemicals, and medical technology. And the pattern has changed: Many companies that already have a presence in India are no longer thinking solely in terms of exports. They want to manufacture, assemble, and refine products—in India, for India. At the same time, energy costs in Germany continue to rise—an additional driving factor that is accelerating the shift of production to more competitive locations.
[Read more: From Export Strategy to Local Production & From Sales to Production Setup].
What the EU-India Free Trade Agreement Means Now
The agreement has been in effect since January 2026—you’re already familiar with the details [our in-depth analysis of the FTA based on real-world experience]. What matters most to decision-makers now is this: The competitive advantage belongs to those who act early.
Tariffs are falling, market access is being streamlined, and standards are being harmonized—and companies that manufacture in India benefit from tariff advantages in both directions: toward the EU and into neighboring Asian markets.
The crucial timing factor: Companies that act now will secure advantages in terms of location, personnel, and partnerships before their competitors catch up. Those who wait will end up paying more in one to two years—for land, skilled workers, and access to networks.
What Flottweg Does Right
A concrete example of this shift: Flottweg—a machinery manufacturer based in Vilsbiburg near Landshut that produces decanters and separators—has chosen India as its 13th overseas location. In the western Indian state of Goa, the company plans to produce for the local market and export to neighboring countries.
The reasons behind the decision: a huge market, low costs, and a skilled workforce. What makes this move particularly noteworthy is that Flottweg prepared for it carefully. The company drew on expertise both from within—a manager with many years of experience in India—and from outside: us, as a German-Indian service provider specializing in company formation, real estate acquisition, and establishing a local presence.
For Flottweg COO Jörg Lengenfelder, the EU-India Free Trade Agreement was a decisive factor:
“That was definitely a trigger. If tariffs drop significantly, that’s very attractive to us.”
However, as a medium-sized company with about 1,300 employees, it was also important to navigate the country’s legal, tax, and regulatory pitfalls with the help of experienced partners.
That is exactly the approach we believe is the right one.
Speed is good. Preparation is better.
The free trade agreement is building momentum—but momentum can lead to haste. And in India, haste is rarely a good guide.
India requires time, trust, and a physical presence. That is why we organize targeted market exploration trips for our clients: to experience the market firsthand, meet key decision-makers, and gain a realistic understanding of prices, requirements, and the quality of potential partners—before making a far-reaching decision.
And once the decision is made: In the medium term, we recommend establishing your own subsidiary with a local team. Not because it’s the easiest route, but because it ensures full control over pricing, customer relationships, quality standards, and your own brand.
What You Should Do Now
India isn’t something to put off until later. The geopolitical course is being set right now. The free trade agreement has been signed. Your competitors are already taking action.
The crucial question is no longer whether India—but how.
Please contact us. We are a German-Indian consulting and services partner headquartered in Bochum with six offices in India. We support companies in addressing complex challenges related to doing business in India—from market entry and establishing operations to achieving sustainable growth on the Indian subcontinent.
Schedule a consultation now
Read the full Handelsblatt article: Go to the article “How Small and Medium-Sized Businesses Benefit from New Free Trade Agreements.”
