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India’s cotton textiles were grappling with potential loss of share in the large US market and rising costs on home turf
India-US trade deal cuts tariffs from 50% to 18%, boosting prospects for Indian textile, gems & jewellery, fisheries, and chemical sectors.
"The steps taken towards strengthening services sector and sectoral initiatives in semiconductor, marine, textiles, leather and other labour intensive sectors will also help grow exports in these sectors," Commerce Secretary Rajesh Agrawal said.
Taken together, the measures signal a shift towards reducing export costs, easing compliance burdens and diversifying markets as India seeks to cushion its exporters from the fallout of tariff actions in the US and other major economies.
The Budget has also proposee 'mega textile parks' with a thrust on value addition and technical textiles, while simultaneously strengthening khadi, handloom and handicrafts through investments in training, skilling and quality upgradation
Key beneficiaries include Tiruppur in Tamil Nadu, Ichalkaranji in Maharashtra, Surat in Gujarat, Ludhiana in Punjab, and Hyderabad - Warangal in Telangana, where easier access can translate into larger EU orders and more factory jobs across spinning, weaving, processing and stitching.
On non-tariff barriers such as the EU’s Carbon Border Adjustment Mechanism (CBAM), Wadhawan said India has been able to meet the bloc’s existing standards for exports and can navigate stricter regulations.
The FTA is expected to be signed on January 27, with EU Commission president Ursula von der Leyen and European Council president António Costa expected in Delhi as the chief guests at the Republic Day parade
Under the deal, the EU stands to gain easier access for its wines, spirits, and automobiles in the Indian market, while India is expected to expand its exports of labour-intensive goods such as textiles, leather, and marine products.
Exporters are seeking lower import duties on raw materials, continued support for MSME-led exports, and measures that ease cash-flow pressures. Support for clean energy adoption and technology upgrades is also seen as important to meet global market requirements.
Year-long exercise from 2027 to track credit access, loan repayment and global market integration in India’s most labour-intensive industry
Experts say the free trade agreement also allows Indian exporters to diversify goods at a time when many face steeper US tariffs, positioning Oman as a strategic link to the Gulf and African markets.
New Delhi and Muscat are set to sign a trade deal on December 18 during Prime Minister Narendra Modi’s visit to the Gulf nation.
Goyal acknowledged that some pending issues still need to be ironed out to conclude India-EU FTA talks
Comprehensive business model offering multi-country, multi-product solutions may reduce impact of tariff
The Rs 20,000-crore Credit Guarantee Scheme will ease access to bank finance for exporters but may not offer any relief for existing NPAs.
Liquidity pressure is mounting on certain MSME exporters, with increasing calls for a moratorium on payment of dues to banks as well as government-backed credit support.
Currently, the preferential trade agreement (PTA) with the Mercosur trade bloc covers about 450 tariff lines. Talks are on to expand the PTA further to cover more items across agriculture, industrial goods, pharmaceuticals, and textiles, government officials told Moneycontrol.
