India–EU Free Trade Agreement Seen Boosting Textiles, Pharma and Engineering Exports

New Delhi, Jan 17 : Exporters across key sectors such as textiles, pharmaceuticals, chemicals, engineering goods, leather, and gems and jewellery are optimistic that the proposed free trade agreement (FTA) between India and the 27-nation European Union will significantly enhance India’s export competitiveness.

According to industry representatives, negotiations for the India–EU FTA are in the final stages and the conclusion of the agreement is likely to be announced on January 27.

At present, Indian textiles and apparel face import duties of 12–16 per cent in the European Union, making them less competitive compared to products from countries that enjoy duty free or lower tariff access. Although India currently benefits from preferential access under the EU’s Generalised Scheme of Preferences (now called DCTS), ready made garments still attract an effective duty of around 9.6 per cent.

Exporters believe that elimination or reduction of these tariffs under the FTA will give a strong push to shipments from India. Kanpur-based Growmore International Managing Director Yadvendra Singh Sachan said the agreement could be a “game changer” for Indian exporters, particularly in the leather and footwear segment.

“Domestic exporters must use this opportunity to significantly scale up shipments to the European market,” Sachan said.

The Federation of Indian Export Organisations (FIEO) also highlighted the strategic importance of the agreement, noting that rising tariffs in the US are impacting a wide range of Indian exports. In this context, FIEO said diversification of export markets has become critical.

“Concluding a comprehensive India–EU Free Trade Agreement is not only timely but strategically vital,” the exporters’ body said, adding that the pact could help India reduce dependence on a few markets while expanding its footprint in Europe.