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India-EU FTA: Apparel Exports to Soar 25%
28 Jan
Summary
- India-EU FTA offers zero-duty access for textiles and clothing.
- Apparel exports to the EU could grow by 20-25% annually.
- The pact restores India's competitiveness against rivals like Bangladesh.
The finalization of the India-EU Free Trade Agreement (FTA) on January 27, 2026, signals a major transformation for India's apparel and textile sector. This landmark trade deal grants zero-duty access for textiles and clothing, opening up the EU's vast import market valued at $263.5 billion for Indian exporters.
Industry projections indicate a substantial year-on-year growth of 20-25% for Indian apparel exports to the EU, a significant increase from the current 3.01% growth rate. This enhanced market access is expected to particularly benefit segments like ready-made garments, home textiles, and various apparel categories.
The FTA addresses the previous tariff disadvantages India faced compared to competitors such as Bangladesh, Pakistan, and Turkey. Experts highlight that this zero-duty access immediately restores India's competitiveness, neutralizes the impact of the earlier GSP withdrawal, and allows Indian products to enter the EU market at more competitive prices.
This agreement provides a timely opportunity for Indian manufacturers to reduce dependence on other markets, expand their reach, and rebalance production capacity. The textile ministry anticipates that the FTA will strengthen the entire textile sector ecosystem, enhancing market access, competitiveness, and employment.
Industry stakeholders emphasize the need to support the MSME sector to fully capitalize on this opportunity, suggesting upgrades in machinery and tailored banking policies to ease lending. The FTA is seen as a crucial step towards achieving the national vision of $100 billion in textile exports.
