Chartered Accountants◆Practising since 2016

Germany to India · Trade and sectors

Trade agreements and sector rules for German investors

CA Utsav Dogra, Chartered Accountant, ICAI M. No. 542375 · Updated

In brief

India and the EU concluded negotiations on a free trade agreement on 27 January 2026; it still needs signature and ratification and does not change FDI rules. Foreign investment from Germany is on the automatic route in most sectors. German investors are most active in automotive and engineering, chemicals and pharmaceuticals, renewable energy.

What is specific to German companies

German investors are concentrated in automotive, engineering, chemicals and renewables. The EU–India agreement is concluded but not yet in force.

Sectors

  • Automotive and engineering
  • Chemicals and pharmaceuticals
  • Renewable energy
  • Engineering and IT capability centres

A trade agreement does not change FDI caps, FEMA pricing or RBI reporting.

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Questions

Does a trade agreement change FDI rules?

No. Tariffs and services access change; FDI policy, sector caps and FEMA reporting still apply.

General information as at 5 November 2026, not advice for a particular case. Indian and German rules change often; confirm the current position before acting. German law points should be confirmed with a German adviser.

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