Interview with Sachin Tikekar, KPIT, and Franz Josef Schürmann, KPIT
“The first impact will be visible in SDV program acceleration”
Sachin Tikekar, President & Joint Managing Director of KPIT (right), and Franz Josef Schürmann, President & Managing Director – Europe at KPIT, assess in the interview the significance of the EU–India free trade agreement for the automotive and software industries. They expect faster SDV programmes, greater scalability in development, and fresh momentum for AI-driven vehicle architectures.
KPIT
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).
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)?
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.
