India-EU FTA diversifies markets for IT exporters, provides hedge against geopolitical challenges: Nasscom

Representative image

The National Association of Software and Service Companies (Nasscom) applauded the India and the 27-nation European Union’s free trade agreement, calling it a win for the Indian technology services industry as this opens up newer markets in the region and provides rules-based predictability amid ongoing geopolitical uncertainties in the key markets like US.

The technology industry body said this could lower non- tariff barriers and ease cross border delivery. “Services being dominant and faster growing part of both economies, the gains would be in the form of better EU market access for Indian tech…Digital trade rules to support business while protecting privacy, security and public policy,” the industry body said.

“Given the geopolitical challenges, the FTA diversifies markets for Indian IT exporters, providing a hedge against global trade uncertainties. It strengthens India's position in global value chains for digital services,” Nasscom added.

According to Nasscom, this FTA will be a constructive framework to enable Social Security Agreements in 5 years with all the EU Member States.  The agreement fosters deeper EU-India ties in technology, innovation, and digital areas (building on the India-EU Trade and Technology Council).

“This could lead to more EU investment in India's IT ecosystem, joint ventures, R&D in AI, semiconductors, clean tech, and startups. Indian IT companies could benefit from technology transfer, co-creation, and expanded partnerships,” the industry body noted.

In turn, by boosting bilateral trade and economic ties, the deal supports job creation, MSME growth in tech, and overall confidence for investors in India's services sector.

India-EU FTA

The trade agreement talks were concluded on January 27.

India will eventually gain $75 billion in exports under the free trade agreement, with preferential access on over 99 percent of goods, while the EU is expected to double its outbound shipments to by 2032 due to tariff cuts or eliminations.

To be sure, the benefits from tariff reductions or eliminations will materialise once the FTA is implemented, which may take at least a year after the deal is signed.

Both sides have described the pact as the world’s largest bilateral trade agreement, reflecting its scale across goods, services and sustainability.