India stands to gain in the long run from global moves towards free trade and reduced tariff barriers, even though short-term challenges may arise.
This perspective was shared by Santosh Iyer, Managing Director and CEO of Mercedes-Benz India, who remains optimistic about India's role in a shifting global trade environment.
Iyer stated that although the Indian automotive sector has not been directly affected by trade tensions such as those triggered by former US President Donald Trump's tariff policies, the broader economic scenario still influences the luxury segment.
Factors such as geopolitical unrest, fluctuations in global currencies, and ongoing supply chain issues are adding to the volatility, yet consumer sentiment remains largely positive.
He emphasised that for the first time, serious discussions around the opening of India’s borders for two-way trade are taking place. According to him, India has traditionally been cautious about international trade, but a shift in mindset is underway.
Iyer reiterated the brand’s support for more open and fair trade policies, arguing that such approaches are key drivers of global economic growth and innovation.
Highlighting the long-term benefits of free trade, Iyer said that a system built on low tariffs and minimal trade barriers has already proven effective in boosting international trade. These policies, he noted, have not only supported economies but also benefited communities worldwide.
He acknowledged that while the immediate impact of changing trade dynamics may be disruptive, the long-term outlook remains positive. In his view, better trade relations and reduced barriers to the movement of goods and services would ultimately help India's economy.
He added that India is well-positioned to benefit from the evolving geopolitical landscape, as global trade realignments create new opportunities.
Iyer also pointed out that the luxury car segment in India has remained resilient, despite the economic uncertainty.
Though the Indian auto industry is largely insulated from direct effects of global tariff disputes — since most luxury cars are manufactured domestically — indirect consequences are being felt. He cited the depreciation of the rupee as one such example, which has led to price increases across luxury vehicle models.
This, in turn, may affect overall demand. However, Iyer believes that the outlook for the luxury market remains steady.
He said that while the current global situation may keep growth relatively flat for the rest of the year, a more favourable trade environment in the latter half could spur renewed momentum.
He also mentioned that many customers, especially those involved in export-oriented businesses in regions like Agra, continue to exhibit a strong appetite for luxury vehicles, reflecting confidence in the market despite international uncertainty.
Looking ahead, Iyer estimated that the luxury car segment in India could see sales of over 51,500 units in the current financial year, compared to around 49,800 units in the previous one.
Although growth may be limited in the short term, a recovery is possible if trade agreements are finalised and global conditions stabilise.
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