As India and European Union (EU) signed free trade agreement, the EU announced duty-free entry into the 27-nation bloc for textile and apparel.
Following the signing of the India–European Union Free Trade Agreement (FTA), the European Union has announced duty-free entry for Indian textile and apparel products across its 27 member countries, marking a major boost for the sector. The EU is India’s second-largest export destination for textiles and apparel after the United States. The agreement comes at a critical time for Indian exporters, who have been under pressure following steep tariffs imposed by the US in April 2025.
Under the FTA, Indian textile and apparel products will receive zero-duty access across all tariff lines in the European market, reducing duties by up to 12%. In return, India has agreed to reduce tariffs on machinery imports from European countries by around 44%. Additionally, import duties on key textile raw materials such as mono ethylene glycol (MEG) and purified terephthalic acid (PTA) will be reduced from 22% to zero once the agreement comes into force, benefiting man-made fibre and polyester manufacturers.
India’s current textile and apparel trade with the EU stands at approximately USD 7.2 billion. With average EU import duties on Indian apparel at around 10%, duty-free access is expected to significantly improve India’s competitiveness against countries such as Bangladesh, Vietnam and Sri Lanka, which already enjoy preferential or zero-duty access to the European market.
While industry experts believe the agreement will help offset losses caused by US tariffs, they note that the full benefits of the deal may materialise only by FY 2028, as the agreement will require ratification by EU member states. KM Subramaniam, President of the Tiruppur Exporters’ Association, welcomed the development, calling it a long-awaited milestone. He said the Tiruppur region could see export growth of nearly 15% once the agreement becomes fully operational.
Apparel Export Promotion Council (AEPC) Chairman A. Sakthivel said the FTA eliminates tariffs on 100% of apparel tariff lines, improving access across all EU member countries. He noted that the EU is the world’s largest apparel importer, with imports valued at USD 202.8 billion in FY 2024–25. Major EU markets such as Germany, France, Spain and Italy already source significantly from India, and the agreement is expected to further expand exports to these countries.
Although the EU accounts for nearly 28% of India’s apparel exports, India’s share of the EU apparel market remains at just 2.9%. Sakthivel said the removal of tariffs would provide Indian exporters, particularly MSMEs, a level playing field against competitors such as Bangladesh, Turkey and Vietnam.
Speaking to the media in New Delhi, Union Commerce and Industry Minister Piyush Goyal said the textile sector could generate an additional 6 to 7 million jobs following the implementation of the FTA. He added that the agreement would strengthen India’s position across the entire textile value chain.
Industry experts estimate that overall textile and apparel exports could grow by nearly 50% over the next five years, with incremental gains of USD 10–11 billion over baseline levels. However, Haresh Calcuttawala, CEO and Co-founder of Trezix, cautioned that long-term success in the EU market would depend on consistent quality, regulatory compliance and value delivery, alongside sustainable and ethical business practices.
According to the European Commission, the next steps include the publication of the negotiated draft texts, followed by legal review and translation into all official EU languages. The agreement will then require approval by the EU Council and consent from the European Parliament, as well as ratification by India, before it can formally enter into force.
News Courtesy : The New Indian Express