The Free Trade Agreement (FTA) between India and the European Union is emerging as one of the country’s most strategic economic partnerships, with the potential to significantly reshape India’s trade and innovation landscape. This agreement supports India’s approach to ensuring a reliable and multifaceted partnership. It will bring key opportunities for growth and export expansion and will continue to realize Prime Minister Narendra Modi’s vision for Viksit Bharat.
Main benefits and elimination of customs duties
Additionally, the FTA is expected to boost Indian exports to the European Union (EU), currently valued at around INR 1.44 lakh crore (USD 16.6 billion), according to the Gujarat Chief Minister’s Office. As a growing economy, India has gained preferential access to European markets for 97 percent of tariff lines and 99.5 percent of trade value. 70.4 percent of tariff lines covering 90.7 percent of Indian exports will benefit from immediate duty elimination for important sectors such as textiles, leather and footwear, tea, coffee, spices, sports goods, toys, gems and jewelry, marine products (shrimp, prawns, etc.), processed food products, canned vegetables, bakery products, automobiles, steel, pharmaceuticals, products chemicals, etc. percent of Gujarat’s total exports to the EU.
A boost for the textile and clothing sector
The EU is the second largest destination for Indian textile and clothing exports. Achieving zero-duty access on textiles and clothing, covering all tariff lines and reducing customs duties by up to 12 percent, would open up the EU’s import market, estimated at $263.5 billion. Building on India’s current global textile and apparel exports of $36.7 billion, including $7.2 billion to the EU, this would significantly expand opportunities, particularly in the areas of yarns, cotton yarns, synthetic fiber garments, ready-made garments, men’s and women’s wear and home textiles. India’s textile exports to the EU are dominated by ready-made garments (RMG) (~60%), followed by cotton textiles (17%) and synthetic fiber and MMF textiles (12%). Surat in Gujarat is driving the production of MMF and synthetic textiles. Furthermore, it would strengthen India’s presence in blended and man-made fiber products and local industries, thereby enabling them to grow, generate employment and strengthen their position as a reliable, sustainable and high-value sourcing partner.
Major gains for gemstones and jewelry
The gems and jewelry sector, rooted in heritage craftsmanship and powered by a strong MSME base, is poised to gain a major competitive advantage in the EU market. Surat, one of the largest diamond processing centers in the world, hosts more than 5,000 units, including some of the most advanced large-scale cutting and polishing facilities in the world. With preferential access to the $79.2 billion EU import market under the FTA, Indian jewelry exports worth $2.7 billion are poised for significant growth. Further strengthening this advantage, the Surat SEZ is home to over 250 units spanning jewelry manufacturing, diamond processing and textiles, positioning the region for accelerated expansion of high-value exports.
Growth of maritime exports
India’s maritime exports to the EU are currently valued at $1 billion. Preferential access, through an FTA covering 100 percent of trade value, by reducing customs duties by up to 26 percent, is expected to meet the needs of the EU maritime market for imports ($53.6 billion). Gujarat’s maritime exports will witness a major increase in value-added seafood products.
The chemical sector will experience significant growth
By 2047, India is expected to capture nearly 12% of the global chemicals market and become a manufacturing hub of chemicals worth $1 trillion. Under the India-EU FTA, 97.5 per cent of India’s chemicals export basket by value will be subject to zero duty, removing customs duties up to 12.8 per cent and improving competitiveness in the inorganic, organic and agrochemical segments. This preferential access is expected to accelerate exports, strengthen MSME-led clusters and promote high-value, sustainable and technology-driven products, thereby positioning India as a reliable supplier to the EU’s estimated $500 billion chemicals import market. South Gujarat is driving this growth momentum as the state’s major chemical hub, with the Surat economic region contributing nearly 70% of Gujarat’s chemical GVA. Supported by robust industrial ecosystems and strategic proximity to key ports such as Dahej and Hazira, as well as access to Mundra and JNPT, the region is well placed to take advantage of new export opportunities under the FTA.
A dynamic Gujarat to leverage FTA opportunities
The upcoming Vibrant Gujarat Regional Conference (VGRC), in South Gujarat, scheduled for April 2026 in Surat, will serve as a strategic platform to operationalize the opportunities created by the India-EU FTA. Bringing together high-growth sectors such as textiles and apparel, gems and jewelry, chemicals and petrochemicals, and marine products, the regional conference will connect South Gujarat’s industrial strengths with growing business demand in the EU.
With the ‘Mother of All Deals’ eliminating customs duty on 99.5 per cent of trade value, the VGRC South Gujarat provides a timely opportunity for industry leaders to leverage favorable market access. The regional conference will enable regional industries to take full advantage of the FTA and accelerate resilient and future-ready export growth. (ANI)
(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)
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