Union Commerce and Industry Minister Piyush Goyal recently announced that India and the European Union (EU) were expected to formally sign their long-awaited free trade agreement (FTA) by December of this year, with the pact likely to come into force by February-March 2027.
Goyal said, “By reducing tariffs on a range of goods and services, the deal would substantially boost India’s access to European markets." He pointed out that a significant portion of Indian exports would have duty-free access under the FTA, opening up new commercial, manufacturing and export prospects. Here’s a quick look at which sectors stand to gain from the India-EU FTA.
Textile (EU tax: 12 to 0 per cent)
With significant potential for growth in India’s apparel and textile industries, the deal might prove to be a major victory for labour-intensive exports and MSMEs. Indian clothing and textiles are considerably less expensive on European shelves due to zero duty, which can soon result in larger customer contracts, longer production cycles and more consistent factory utilisation. The pact would give India access to the USD 263.5-billion EU textile market, where exports are currently only valued at USD 7.7 billion.
Leather (EU tax: 17 to 0 per cent)
The new deal can encourage formal jobs and MSME involvement in the industry while supporting Indian companies in winning new EU orders in both mass and mid-premium segments. India is prepared to increase its market share in the USD 100 billion EU leather and footwear import sector.
Gems and jewellery (EU tax: 4 to 0 percent)
India’s advantage in design-driven and precision-driven jewellery exports, where accuracy, timeliness and craftsmanship are just as important as pricing, is strengthened by zero duty. In addition to fostering closer ties with European wholesalers and brands, lower landing costs can increase EU demand in both studded and plain gold sectors. Gains in cutting, polishing, setting, and finishing are expected, and the sector’s employment multiplier is substantial due to its MSME-heavy and artisan-supported nature.
