The European Union could shoulder much of India’s US-bound exports if a trade deal is finalised quickly, a Moneycontrol analysis shows.
In 2024, India exported $79.4 billion worth of goods to the US, almost matching the $77.5 billion shipped to the EU-27. Of this, nearly $67.2 billion—about 85 percent—could find room in the European market, given the bloc’s large and diversified import appetite.
While Europe offers India a large alternative market and a buffer against US tariff shocks, the gains would depend on the fine print of the trade pact. Without deep tariff cuts, mutual recognition of standards and flexible rules of origin, exporters risk facing higher costs and slower turnaround times, diluting the opportunity.
Diamonds stand out as one of the biggest opportunities for India. While the US bought $4.8 billion worth of Indian diamonds last year, EU purchases were just $1.7 billion despite importing $7.3 billion overall.
"The FTA with EFTA nations comes into effect from October 1, around 20 days from now, the one with the UK awaits parliamentary approval, and with the EU, we are trying to speed up," India’s Commerce and Industry minister Piyush Goyal said at an event on September 9.
That leaves a gap of $5.6 billion that India could, in principle, plug. Similar openings exist for medicaments and smartphones, where Europe sources tens of billions from other countries but relatively little from India. Though exempt from the current round of US tariffs, these categories represent future diversification avenues should levies widen.
Other areas with scope for redirection include jewellery, seafood and machinery parts. The EU’s recent listing of 102 new Indian fishery establishments for export is expected to boost shipments by nearly 20 percent.
Shrimp is a case in point: India sold $1.85 billion worth to the US in 2024 but only $493 million to Europe, even as the bloc imported $3.03 billion overall.
Not every sector offers relief. Carpets are a clear constraint—India exported $647 million to the US in 2024, but Europe’s total carpet imports were just $630 million, limiting substitution potential. Price sensitivity is another hurdle.
With per capita GDP at around $63,000—roughly 72 percent of US levels—the EU has the capacity but may not always match American willingness to pay. Pharmaceuticals and electronics, where regulatory compliance is rigorous, will also require sharper positioning on standards and pricing.
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