Nearly 95% of European companies plan expansion in India as investors bet on manufacturing, supply chains, and long-term partnerships.
European Union (EU) companies operating in India remain strongly optimistic about the country’s economic prospects and investment climate, with the recently signed EU–India Free Trade Agreement (FTA) emerging as a key driver of future growth, according to the Business Sentiment Survey (BSS) 2026 released by the Federation of European Business in India (FEBI).
The survey, unveiled at the EU–India Business Forum in New Delhi ahead of the EU–India Summit, underscores growing investor confidence and a clear intent among European companies to expand operations, deepen manufacturing presence, and strengthen supply chains across India over the next five years.
Nearly 95 per cent of EU companies surveyed said they plan to expand their operations in India, reflecting strong confidence in the country’s medium-term growth outlook. Almost 90 per cent of respondents reported that their India operations are currently profitable, reinforcing India’s position as a core and mature market for European businesses rather than just a long-term bet.
The survey draws structured feedback from FEBI member companies representing a broad cross-section of major European investors with established and long-standing operations across sectors and regions in India. The findings highlight India’s growing importance both as a large consumption market and as a global manufacturing and export hub, with EU firms increasingly investing in local production, export-oriented manufacturing, and deeper integration into global supply chains.
H.E. Hervé Delphin, Ambassador of the European Union to India and Bhutan and Honorary President of FEBI, described the EU–India economic partnership as strategically critical. “Trade, investment, industrial partnerships, and economic cooperation are key components of the renewed EU–India partnership.
The conclusion of the EU–India FTA represents a landmark achievement, one of the most consequential trade deals in the world,” Delphin said, calling it the “mother of all deals” that will provide a stable and long-term framework for two-way trade across a combined market of nearly two billion people, accounting for almost a quarter of global GDP.
The EU remains India’s largest trading partner, with bilateral trade in goods and services touching €190 billion in 2024–25. It is also among the leading sources of foreign direct investment, with a cumulative FDI stock of around €140 billion until 2025. Nearly 6,000 EU-based companies currently operate in India, employing millions and contributing across manufacturing, services, and innovation-led sectors.
FEBI President Jürgen Westermeier, who is also President of Airbus India and South Asia, said the survey reflects the long-term commitment of EU companies to India while underlining the importance of predictability and execution. “Confidence in India’s growth trajectory and in deepening EU–India cooperation is strong. However, day-to-day operating realities matter. Predictable policies, transparent regulatory processes, efficient logistics, and ease of compliance are essential to sustain investment momentum,” he said.
While overall sentiment remains positive, the survey also flags areas requiring targeted improvements to accelerate future growth. Faster regulatory approvals, smoother customs processes, clearer compliance requirements, and more effective policy implementation were identified as key enablers, particularly for companies planning to scale up investments.
From a strategic perspective, the survey shows EU companies translating policy alignment into tangible business action. FEBI Vice President Deepak Sharma, president of the Greater India Zone and CEO and managing director of Schneider Electric India, said India is becoming a critical anchor in global production and innovation networks. “EU companies are expanding manufacturing capacity, localising advanced technologies, and embedding sustainability across operations and supply chains. Combined with India’s scale, talent pool, and improving infrastructure, this creates a strong platform for building resilient and sustainable value chains serving both domestic and global markets,” he said.
Manufacturing and supply chain collaboration emerged as top priorities for future EU–India cooperation, supported by growing interest in sustainability, talent development and digital innovation, the survey noted.
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