Editor’s Note
The proposed India-EU Free Trade Agreement represents a pivotal strategic partnership, poised to significantly enhance India’s export potential and global market integration. This analysis highlights the substantial economic momentum such an agreement could generate.
Gandhinagar, February 6 (IANS). The proposed Free Trade Agreement (FTA) between India and the European Union (EU) has emerged as one of India’s most strategic economic partnerships. This agreement is set to give new momentum to India’s trade, innovation, and credible participation in global markets. Currently, India’s exports to the EU are approximately ₹1.44 lakh crore (USD 16.6 billion), with significant growth potential anticipated after the FTA.
India will gain preferential access to European markets on 97% of tariff lines and 99.5% of trade value. Tariffs will be eliminated immediately on 70.4% of tariff lines, covering 90.7% of India’s exports. Key sectors included are textiles, leather, footwear, tea, coffee, spices, sports goods, toys, gems & jewellery, marine products, processed foods, automobiles, steel, pharmaceuticals, and chemicals.
Notably, these sectors accounted for approximately 25% of Gujarat’s total exports to the EU in FY 2024-25. The EU is India’s second-largest export market for textiles and apparel. Post-FTA implementation, a reduction of up to 12% in tariffs on textiles and garments, and zero duty on all tariff lines, will facilitate easier access to the EU’s USD 263.5 billion import market. India’s total textile and apparel exports are USD 36.7 billion, of which USD 7.2 billion goes to the EU.
Ready-made garments (60%), cotton textiles (17%), and MMF & synthetic textiles (12%) hold the major share in exports to the EU. Surat in Gujarat, a major hub for MMF and synthetic textile production, is well-positioned to benefit the most from this new opportunity.
Similarly, the gems and jewellery sector, especially MSME-based units, is set to gain a new competitive edge in the EU market. Surat, one of the world’s largest diamond processing centers, is a key hub with over 5,000 units. Preferential access to the EU’s USD 79.2 billion import market could boost India’s USD 2.7 billion jewellery exports. Furthermore, over 250 units in the Surat SEZ are active in jewellery, diamonds, and textiles, ready to leverage these new opportunities.
Post-FTA implementation, the marine export sector is also expected to see major positive changes. Currently, India’s marine exports to the EU are USD 1 billion. Post-FTA, a reduction of up to 26% in tariffs and 100% trade value coverage will facilitate easier access for Indian stakeholders to the EU’s USD 53.6 billion marine import market. Gujarat’s value-added marine food products are likely to benefit directly.
Moreover, India is progressing towards achieving a 12% share in the global chemical market and becoming a USD 1 trillion chemical manufacturing hub by 2047. Under the India-EU FTA, zero duty will apply to 97.5% of India’s chemical exports, eliminating tariffs of up to 12.8%. South Gujarat, especially the Surat economic region, contributes 70% to Gujarat’s chemical GVA. Proximity to major ports like Dahej, Hazira, Mundra, and JNPT gives this region a special strategic advantage for export expansion.
The Vibrant Gujarat Regional Summit (VGRC) to be held in Surat in April 2026 will serve as a platform to practically realize the opportunities opened by the FTA for South Gujarat industries. High-growth sectors like textiles, gems & jewellery, chemicals-petrochemicals, and marine products will directly connect with the EU’s growing demand. With tariff elimination on 99.5% of trade value, this summit will provide regional industries an opportunity to take concrete and timely steps towards export growth.
–IANS
SK/ABM