Gandhinagar, February 6: 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 expected to boost India’s trade, innovation, and reliable participation in global markets. Currently, India’s exports to the EU stand at approximately ₹1.44 lakh crore (USD 16.6 billion), with significant growth anticipated post-FTA.
India will gain preferential access to 97% of tariff lines and 99.5% of trade value in European markets. Immediate tariff elimination will apply to 70.4% of tariff lines, covering 90.7% of India’s exports. Key sectors benefiting from this include textiles, leather, footwear, tea, coffee, spices, sports goods, toys, gems and jewelry, seafood, processed food, automobiles, steel, pharmaceuticals, and chemicals.
Notably, in the fiscal year 2024-25, these sectors accounted for about 25% of Gujarat’s total exports to the EU. The EU is India’s second-largest export market for textiles and apparel. With the FTA, tariffs on textiles and garments could decrease by up to 12%, facilitating easier access to the EU’s USD 263.5 billion import market. India’s total textile and apparel exports amount to USD 36.7 billion, with USD 7.2 billion directed to the EU.
In EU exports, ready-made garments hold a 60% share, followed by cotton textiles at 17% and MMF and synthetic textiles at 12%. Surat, Gujarat, a major hub for MMF and synthetic textile production, is well-positioned to capitalize on these new opportunities.
Similarly, the gems and jewelry sector, particularly MSME-based units, is set to gain a competitive edge in the EU market. Surat, one of the world’s largest diamond processing centers, is home to over 5,000 units. Special access to the EU’s USD 79.2 billion import market could invigorate India’s USD 2.7 billion jewelry exports. Additionally, over 250 units in Surat’s SEZ are ready to leverage these new opportunities in jewelry, diamonds, and textiles.
The maritime export sector will also witness significant positive changes following the implementation of the India-EU FTA. Currently, India’s maritime exports to the EU are valued at USD 1 billion. Post-FTA, tariff reductions of up to 26% and 100% trade value coverage will facilitate Indian stakeholders’ access to the EU’s USD 53.6 billion maritime import market, likely benefiting Gujarat’s value-added seafood products.
Moreover, India aims to capture 12% of the global chemical market and become a USD 1 trillion chemical manufacturing hub by 2047. Under the India-EU FTA, zero tariffs will apply to 97.5% of India’s chemical exports, eliminating tariffs by up to 12.8%. South Gujarat, particularly the Surat economic zone, contributes 70% to Gujarat’s chemical GVA. The proximity of major ports like Dahej, Hazira, Mundra, and JNPT offers this region a strategic advantage for export expansion.
The Vibrant Gujarat Regional Summit (VGRC), scheduled for April 2026 in Surat, will serve as a platform to translate the FTA’s opportunities into practical benefits for South Gujarat industries. High-growth sectors such as textiles, gems and jewelry, chemicals, petrochemicals, and seafood will directly align with the EU’s increasing demand. With tariff elimination on 99.5% of trade value, this summit will provide regional industries with a timely opportunity to take solid steps towards export growth.