Skoda Auto Volkswagen India is reportedly nearing the finalisation of a partnership with Indian industrial conglomerate JSW Group, structured as a 51:49 joint venture with the latter holding the majority stake, according to a report by Autocar Professional. Volkswagen Group’s global senior executives are due to meet in Mumbai on 18 August to discuss and potentially approve the deal, with a non-binding memorandum of understanding expected within the next two months.

The venture is intended to fund development of the India Main Platform (IMP), an electric vehicle (EV) architecture derived from Volkswagen’s existing China Main Platform. IMP is adapted for Indian regulations, local suppliers and localisation requirements. The platform is expected to underpin several electric SUVs for both the Volkswagen and Skoda brands, and discussions might extend to sales and marketing operations across other group brands operating in India, which include Audi, Porsche and Lamborghini.

In reality, Volkswagen has been searching for exactly this kind of local partner for years. Amid its ongoing deep restructuring and cost-cutting campaign, the company reduced its planned investment in a dedicated Indian EV platform from US$1bn to roughly US$700m in November 2025. As in the US, the automaker wants to boost its local market share, which lags other global players. In the US, Volkswagen brands capture around a 4% market share; in India an earlier attempt at a tie-up with Mahindra & Mahindra collapsed, and it has remained stuck around 2% for the last two decades.

Volkswagen is also looking to trim reliance on its German manufacturing network and rely more on localised production. The automaker is currently weighing the closure of up to four domestic plants; at the same time, it is weighing a growing reliance on China—one that may even see it import EVs intended for local consumers back into the EU. Meanwhile, VW is leaning further into production in Spain and North America—the former because of lower operational costs compared to Germany, and the latter to sidestep punishing US tariffs.

For global EV makers, India’s import rules add another layer to why a local partner like JSW matters. Standard customs duties on imported EVs run between 70% and 110%, but a scheme known as SPMEPCI lets automakers import up to 8,000 EVs a year at a reduced 15% duty. This is on the provision that they commit at least US$500m to domestic manufacturing within three years, alongside rising local value-addition targets in the years that follow.

Volkswagen and Skoda have already used the scheme to bring in the ID.4 and Enyaq as fully built imports to gauge Indian demand. However, qualifying for the reduced duty on any real scale requires exactly the kind of domestic manufacturing commitment that a capital partner like JSW would help it meet.

Although not among the better-known names in automotive, JSW’s footprint in the industry already runs quite deep. The conglomerate holds a 35% stake in JSW MG Motor, a joint venture with China’s SAIC, and it has separately established JSW Motors to sell rebadged models from Chery Group brands. The company also runs JSW Greentech for buses and commercial vehicles, alongside investments in domestic battery cell manufacturing.

Manufacturing is, of course, expected to take a central role in the new arrangement. JSW Motors is in the process of building a greenfield plant roughly 40 km from Volkswagen’s existing factory in Chhatrapati Sambhaji Nagar, and the partners are reportedly considering using that new facility for joint-venture vehicles. They may also be evaluating higher local content for the Skoda Kodiaq and select Audi models, as well as a localised next-generation Kodiaq to be positioned against the Mahindra XUV700.

Unlike JSW’s existing MG Motor venture, the proposed Volkswagen partnership is being structured with no Chinese participation, which is notable given that it hinges on porting a platform originally developed in China. JSW’s interest extends well beyond this single deal: the group is trying to connect steel, batteries, paints and several separate automotive ventures under one vertically integrated strategy. In this sense, it is treating a Volkswagen tie-up as one component of a broader domestic manufacturing build-out rather than a standalone transaction.

A 51:49 structure that hands JSW operational control marks a departure from how foreign automakers have typically entered India, and Volkswagen’s willingness to accept a minority position suggests its options narrowed considerably once the Mahindra talks broke down. Adapting an existing China-derived platform, while explicitly excluding Chinese ownership from this specific venture, looks more like a practical shortcut to save development cost than any deliberate geopolitical statement.