As India-EU FTA talks progress, European machinery makers see India as top growth market

Even as India is engaging with European Union (EU) to formalise a Free Trade Agreement, a recent business climate survey conducted among European machinery and equipment manufacturing companies by a German organisation shows India to be the bright spot among the four countries covered. China, Brazil and the US are the other countries the survey tracked.

“India remains a fast-growing market for the machinery and equipment manufacturing industry. 27 per cent of the companies surveyed rate their business situation as good, 64 per cent as satisfactory - only 9 per cent as poor. The responses on the order backlog indicate that the Indian domestic market in particular is responsible for the positive business climate”, the findings of the survey , conducted by Frankfurt based VDMA, Europe’s largest association for machinery and equipment manufacturers, said.

According to the survey, the outlook for the future of India business is even more positive for the European machine makers. While 62 per cent of companies expect the business situation to improve further in the coming months, only 2 per cent expect it to deteriorate. “For 2025/26, companies expect nominal turnover growth of 9 per cent. 54 per cent of those surveyed already manufacture in India, of which 74 per cent intend to further expand their capacities. Of the 46 per cent without their own local production facilities, 21 per cent are aiming to do so”, VDMA said in a statement.

The survey says that while India and Brazil show stable to positive figures, China is struggling with structural challenges. The market in the USA also shows a cautious development, not least due to the latest customs policy, it points out. “While India is developing into a reliable growth market, clear strategies for dealing with political and structural challenges are needed in China and the USA”, it said. The association conducts such surveys every six months.

"The current results confirm once again that machinery and equipment manufacturing is a globally active industry with very different local structures. Our companies are navigating through regional uncertainties, geopolitical hurdles and economic fluctuations – with India as a clear bright spot," says Dr Johannes Gernandt, Chief Economist of the VDMA.

The VDMA Business Climate Survey was conducted between 14 April and 2 May 2025. More than 400 subsidiaries of German machinery and equipment manufacturing companies in the individual countries took part.