New Delhi: Union Commerce and Industry Minister Piyush Goyal has said that India and the European Union (EU) are expected to sign their long-pending Free Trade Agreement (FTA) by December 2026, with the agreement likely to become operational by February-March 2027.
The proposed pact is expected to significantly improve market access for Indian exporters by reducing or eliminating tariffs on a wide range of goods and services. According to Goyal, the agreement will enable a substantial share of Indian exports to enter European markets duty-free, creating new opportunities for trade, manufacturing and employment.
Among the biggest beneficiaries is expected to be India’s textile and apparel sector. At present, Indian textile exports to the EU attract duties of up to 12 per cent. Under the proposed agreement, these tariffs are likely to be reduced to zero, making Indian products more competitive in one of the world’s largest textile markets. Industry experts believe the move could particularly benefit labour-intensive sectors and micro, small and medium enterprises (MSMEs), while helping India expand its presence in the EU’s estimated USD 263.5 billion textile market. India’s current textile exports to the bloc are valued at around USD 7.7 billion.
The leather and footwear industry is also expected to receive a major boost. Existing European tariffs of up to 17 per cent on Indian leather products are likely to be eliminated, improving the competitiveness of Indian manufacturers. The duty-free access could help Indian exporters secure larger orders from European buyers and strengthen their position in the EU’s nearly USD 100 billion leather and footwear import market. Industry stakeholders believe the agreement could generate additional employment and encourage greater participation from MSMEs.
India’s gems and jewellery sector stands to gain as well, with current EU duties of around 4 per cent expected to be removed. The tariff reduction is likely to improve the price competitiveness of Indian jewellery exports and support growth in both plain gold and studded jewellery segments. The industry, which relies heavily on skilled artisans and small businesses, could benefit from increased demand from European wholesalers and brands, while also strengthening India’s position as a global hub for jewellery manufacturing and exports.
The proposed India-EU FTA is regarded as one of India’s most significant trade negotiations and is expected to deepen economic ties with the 27-member European bloc while providing a major boost to key export-oriented sectors.
