Fashion
India’s textile & apparel exports to enjoy zero duty under EU FTA
The agreement covers conventional areas including trade in goods and services, trade remedies, rules of origin, customs and trade facilitation, while also extending to emerging areas such as small and medium enterprises (SMEs) and digital trade.
The landmark India-EU free trade agreement will eliminate tariffs of up to 10 per cent on nearly $33 billion of Indian exports including textiles, apparel, leather and footwear.
Covering goods, services, SMEs and digital trade, the pact will enhance market access for over 99 per cent of India’s exports and deepen global value-chain integration.
Prime Minister Narendra Modi and European Commission President Ursula von der Leyen jointly announced the conclusion of the India-EU FTA at the 16th India-EU Summit in New Delhi. The EU has become India’s 22nd FTA partner.
“This is a ‘milestone in our relations’ which will strengthen our economic ties, create jobs for our youth, opportunities for our businesses; foster shared prosperity; and build stronger global supply chains,” Modi posted on microblogging platform X.
The FTA is expected to substantially scale up trade, enhance export competitiveness and integrate Indian businesses more deeply into the European and global value chains, the Indian Ministry of Commerce & Industry said in a release.
“Europe and India are making history today. We have concluded the mother of all deals. We have created a free trade zone of two billion people, with both sides set to benefit. This is only the beginning. We will grow our strategic relationship to be even stronger,” von der Leyen said on X.
Beyond enhancing competitiveness, it will empower workers, artisans, women, youth and MSMEs, while integrating Indian businesses more deeply into global value chains and reinforcing India’s role as a key player and supplier in global trade, the ministry said.
The agreement represents “a comprehensive partnership with strategic dimensions”, it noted, as India has secured unprecedented market access for more than 99 per cent of its exports by trade value to the EU that bolsters the ‘Make in India’ initiative.
Beyond tariff liberalisation, the FTA provides measures to tackle non-tariff barriers through strengthened regulatory cooperation, greater transparency and streamlined customs, sanitary and phytosanitary (SPS) procedures, and technical barriers to trade disciplines.
It embeds multiple review, consultation and response mechanisms to deal with new, sudden challenges which emerge in future.
The FTA reinforces intellectual property protections provided under TRIPS relating to copyright, trademarks, designs, trade secrets, plant varieties, enforcement of intellectual property rights, affirms the Doha Declaration and recognises the importance of digital libraries, specifically the Traditional Knowledge Digital Library (TKDL) project initiated by India.
It is expected to facilitate cooperation in critical areas like artificial intelligence, clean technologies and semiconductors.
“Today marks a historic moment as we open a new chapter in EU-India relations – on trade, security, and people-to-people ties. Our Summit sends a clear message: in a reshaping global order, the EU and India stand together as strategic, reliable partners,” President of the European Council António Costa said in a post on X.
Through the EU’s Carbon Border Adjustment Mechanism (CBAM) provisions, commitments have been secured including a forward-looking most-favoured nation assurance extending flexibilities if any granted to third countries under the regulation, enhanced technical cooperation on recognition of carbon prices, recognition of verifiers, as well as financial assistance and targeted support to reduce greenhouse gas emissions and comply with emerging carbon requirements.
In fiscal 2024-25, India’s bilateral trade in goods with the EU stood at ₹11.5 trillion ($136.54 billion) with exports worth ₹6.4 trillion ($75.85 billion) and imports amounting to ₹5.1 trillion ($60.68 billion).
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