India-EU FTA to boost textiles, gems exports with tariff concessions on 99% of shipments

India will eventually get concessions on more than 99 percent of its exports to the European Union through the free trade agreement.

Duties will be eliminated immediately on 90 per cent of Indian exports to the 27-nation bloc once the trade deal kicks in, rising to 93 percent over seven years, while another 6 per cent will face reduced tariffs under a quota system.

The free trade agreement is expected to give a big boost to India’s labour-intensive sectors, such as textiles, apparel, leather, footwear, marine products, gems and jewellery, handicrafts, engineering goods, and automobiles.

EU tariffs on marine products, chemicals, leather and footwear, textiles, plastics and rubber, base metals, and gems and jewellery will be eliminated once the free trade agreement kicks in. These sectors accounted for $35 billion of India’s exports to the EU in 2025, with tariffs on $33.5 billion worth of goods removed immediately upon implementation.

India will also receive a vehicle export quota to the EU that is 2.5 times larger than the quota it has granted European automakers.

In return, India has committed to liberalising tariffs on most EU goods, with duties on 30 percent of traded value eliminated at entry into force and tariffs reduced to zero on 93 percent of bilateral trade value over a 10-year period.

India will also offer tariff reductions and quotas on another 3.7 percent of traded goods, taking overall coverage to nearly 97 percent.

The EU will open 96.8 percent of its tariff lines, while India will open 92.1 percent.

In 2024-25, India’s bilateral merchandise trade with the European Union stood at about $136.53 billion, with exports worth $75.85 billion and imports around $60.68 billion, making the EU India’s largest goods trading partner.

India also ran a goods trade surplus of approximately $15.17 billion with the bloc in that period.