Software Defined Vehicles
Interview with Sachin Tikekar, KPIT, and Franz Josef Schürmann, KPIT
“The first impact will be visible in SDV program acceleration”
The EU–India trade agreement could significantly accelerate software development for European OEMs. Indian software and engineering specialist KPIT, with a strong presence in Europe, assesses the implications. Where the greatest leverage lies is explored in this interview.
The EU–India free trade agreement has been set in motion politically, although its formal conclusion is still pending. Nevertheless, the initial reactions have been largely positive, with the deal seen as a signal of economic openness and closer technological cooperation. But what does it mean in concrete terms for companies operating in both markets? That is what we asked KPIT.
In this interview, President Sachin Tikekar and Europe Head Franz Josef Schürmann explain why they expect faster SDV programmes, more scalable engineering structures, and additional momentum for AI-driven vehicle development. They also outline the concrete short-term effects they anticipate and where they see the agreement’s greatest leverage.
ADT: India and the EU have now concluded a trade agreement. What was your first reaction when you heard about it and what significance does this signal have for the automotive and tech industries in your view?
Tikekar: My reaction was that this is a true milestone. India and Europe are sending a strong signal of economic openness, resilience, and collaborative technological development. The automotive and software industries thrive on global cooperation and the reduction of tariffs and non tariff barriers strengthens precisely this ecosystem. Particularly positive is the progress in services, digital trade, and professional mobility, which now have clearer and more open frameworks. This makes collaboration between teams across both continents much easier and accelerates innovation in areas such as SDV, E/E architectures, ADAS (ed.: Advanced Driver Assistance Systems) and AD (ed.: Autonomous Driving).
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Schuermann: My first thought was: Finally! This agreement comes at a time when European OEMs and suppliers are under enormous pressure to shorten development cycles and scale software capabilities globally. The FTA creates a new strategic bridge between two strong markets. For the European automotive industry, it primarily means more speed, greater flexibility, and lower market entry barriers, especially for software intensive development programs. Europe needs access to highly qualified software talent and India is one of the strongest global partners in this field.
Do you expect the agreement to accelerate cooperation between European OEMs and Indian automotive software partners – for example, through easier market access or new development collaborations?
Tikekar: Absolutely. The agreement improves three decisive factors. Easier market access and reduced bureaucratic hurdles. This speeds up the launch of new programs and enables quicker ramp ups. Better conditions for the exchange of experts. Professional mobility will be a key enabler, especially in complex areas such as safety architectures or homologation. Stronger legal certainty and clearer rules. Particularly around digital services and data flows, there is now more predictability. This will significantly simplify collaboration between European OEMs and Indian software partners and accelerate development partnerships that otherwise would have been initiated later.
Schuermann: We already see European OEMs strategically strengthening their global software capacities. With the agreement, some of the previous obstacles disappear, for example in technical services, qualification recognition, or project approvals. In practice, this means more joint development programs, especially in SDV platforms, middleware, diagnostics, cybersecurity, and generative engineering tools. It also means faster scalability, as teams can be set up more flexibly and operated in hybrid models. And it enables new partnership models, shifting from classical work packages to co creation centers. So yes, cooperation will clearly accelerate.
Do you foresee any impact from the agreement on location and personnel strategies? Could it, for example, lead to more European companies building up development resources in India or conversely to Indian companies like KPIT investing more heavily in the EU? And how does this relate to the emerging India for India strategy, where German car and truck OEMs leverage the Indian ecosystem to develop India specific features that can later be exported to other growth markets?
Tikekar: The agreement increases the strategic attractiveness of both regions. For European companies, India becomes even more compelling because market entry barriers drop and over 96 percent of EU industrial exports to India will face reduced or zero tariffs. At the same time, Indian companies benefit from almost duty free access for most exports into Europe. We therefore expect that European OEMs and Tier 1s will expand their development footprints in India to drive software intensive topics faster and more efficiently. Indian companies including KPIT will expand investments in the EU, particularly in specialized competence centers for SDV, functional safety, cybersecurity, or homologation. In addition, we see strong momentum for an India for India approach. As India becomes a strategic growth market for global OEMs, German car and truck manufacturers increasingly tap into the local ecosystem to build India specific features and platforms. These can then be scaled and exported from India to other emerging markets, using India as both a development and innovation base.
Schuermann: In Europe we see two very clear trends. Near customer engineering is becoming more important. OEMs want partners with strong local presence who can still scale globally. The agreement supports exactly this model. The competition for software talent remains intense. Companies will increasingly adopt bimodal strategies, highly experienced European teams combined with scalable development structures in India. For KPIT, this means we will continue expanding our presence in Europe, both at customer sites and in central engineering hubs, while also leveraging the improved bilateral team structures enabled by the agreement. The India for India strategy also plays an increasingly relevant role. As global OEMs build stronger India focused portfolios, we expect more integrated cross regional engineering ecosystems, where India serves not just as a development hub but also as a source of market appropriate innovations for broader deployment in other growth regions. Overall, I expect a shift toward more interconnected, multi market engineering models, rather than an either or approach.
The time dimension: When do you expect the first concrete effects of the agreement to become noticeable, both for KPIT itself and for your customers (in Europe)?
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Tikekar: We expect the first tangible effects rather quickly. In areas like expert mobility, recognition of professional qualifications, and reduced administrative barriers, improvements will likely be visible within the next 6 to 12 months. For KPIT, this means faster alignment cycles, quicker deployment of specialists and smoother onboarding for cross regional teams. For our customers in Europe, the immediate benefit will be shorter lead times when setting up new software programs, especially in domains like E/E architecture or safety compliance, where specialized expertise is crucial. Medium term, within 12 to 24 months, we foresee structural changes, larger joint development programs, more hybrid engineering teams, and significantly improved efficiency in bilateral project execution. The agreement is a catalyst and the effects will compound over time.
Schuermann: I expect the earliest effects to show up in project velocity. Many European OEMs already work with Indian partners, but the practical hurdles from contracting to visas to technical services often slow things down. As these obstacles disappear, we will feel the first impact inside ongoing and new SDV related programs almost immediately. For European OEMs, the bigger effects will materialize within 2026 and 2027 as they recalibrate their global development strategies. With reduced friction, we will see more distributed software development environments that operate as one integrated ecosystem. For KPIT, this translates into greater responsiveness, more fluid team scaling, and the ability to ramp up complex software programs for our customers far faster than before.
The strongest practical lever: In which area do you expect the greatest impact or where do you believe the new dynamics will be felt first?
Tikekar: The strongest practical lever will be in software driven automotive development, particularly in areas where iterative co creation is required. Three areas stand out. SDV platforms and middleware. These require large, distributed teams and deep cross domain expertise. The agreement enables exactly this type of collaboration. Safety critical development including functional safety, cybersecurity, and homologation. Faster expert mobility and clearer regulatory processes will dramatically reduce development bottlenecks. Digital engineering and validation. With more flexible cross border data flows and consistent digital trade rules, simulation and testing environments can be operated more seamlessly between India and Europe. We will see the new dynamics first where complexity and specialization are highest and where global cooperation is already essential.
Schuermann: For me, the biggest lever lies in scalability. European OEMs urgently need scalable, flexible software development models. Until now, administrative and regulatory friction often limited that scalability. This agreement removes several of those constraints. The first impact will be visible in SDV program acceleration, where time to software is a critical competitive factor, diagnostics, OTA, and cybersecurity, where continuous updates and rapid iteration cycles are mandatory, and engineering workforce strategies, where OEMs require both deep local expertise and global delivery capability. In short, the new dynamics will first be felt wherever software is the differentiator, which today is almost everywhere in the automotive value chain. Building on both perspectives, another area where the impact will become visible very quickly is in AI led automotive development. As the industry shifts from the Software Defined Vehicle toward the AI Defined Vehicle, AI native engineering, autonomous testing, predictive diagnostics, and intelligent mobility services will accelerate. The agreement enables the global data access, talent mobility, and collaborative engineering models that this AI transformation requires.
