India is aggressively pushing for electric vehicle (EV) adoption, aiming for 30% EV penetration by 2030. Simultaneously, the government is re-negotiating and signing Free Trade Agreements (FTAs) to strengthen global trade. Aligning these two strategies—green mobility and trade liberalization—could supercharge India’s EV sector growth.

1. India’s EV Landscape: A Snapshot

India sold over 1.3 million EVs in FY2025, led by two-wheelers and three-wheelers. The push includes:

• PLI schemes for advanced chemistry cells (₹18,100 crore)
• State EV policies
• FAME II subsidies

Yet, high battery costs (imported), limited global supply chain access, and tariff barriers challenge scalability.

2. What Are Free Trade Agreements (FTAs)?

FTAs are deals between countries to reduce or eliminate tariffs, import quotas, and preferences. India is actively engaging with:

• EU (under India-EU Trade & Investment Agreement)
• UK (India-UK FTA)
• Australia (ECTA signed)
• UAE, Japan, and ASEAN nations

These agreements impact how cost-effective and globally competitive EV components and finished products are.

3. Why FTAs Matter for EV Growth

India still imports over 60% of its EV components, particularly:

• Lithium-ion battery cells
• Power electronics (IGBTs, controllers)
• Electric drive motors

Reducing tariffs through FTAs on these imports could cut EV prices by 8–12%, making them more attractive to Indian consumers and boosting OEM margins.

4. Boosting Exports: India as a Global EV Hub

FTAs can open up export markets for Indian-made EVs and components:

• Tariff-free access to the UK, EU, and Australia can give Indian manufacturers a leg up.
• Companies like Tata Motors and Mahindra are already positioning EVs for exports, especially in Europe and Southeast Asia.

With strategic FTAs, India could emulate China’s model—manufacturing EVs domestically and exporting them globally at scale.

5. Case Study: India-Australia ECTA & Auto Sector Impact

Signed in 2022, the India-Australia Economic Cooperation and Trade Agreement:

• Removed import tariffs on key auto components
• Opened doors for raw material access, such as lithium and rare earths

This has helped Indian EV battery firms form JV talks with Australian miners, ensuring long-term supply chain security.

6. Risks & Challenges

• Dumping Risks: Liberal trade may allow low-cost Chinese EVs or kits to flood the Indian market.
• Local Industry Protection: India needs safeguards for MSMEs and nascent EV startups.
• Rules of Origin Compliance: Strict rules must ensure FTAs benefit genuine domestic production and not just assembly.

7. Strategic Path Forward

To align EV goals with FTAs, India must:

• Prioritize FTAs that offer battery raw material access (lithium, cobalt)
• Demand reciprocal market access for Indian EVs
• Use FTAs to set global harmonized EV standards
• Integrate FTAs with Make in India + Green in India vision

Conclusion: A Balanced, Global Green Shift

Aligning India’s electric mobility goals with FTAs is a strategic move that could reduce input costs, boost exports, and accelerate net-zero ambitions. With careful negotiation, policy safeguards, and trade diplomacy, India can not only electrify its own roads—but also drive the global EV value chain.