India–EU FTA: Electronics makers eye $50 billion export by 2031

The FTA is also expected to deepen collaboration in design, R&D, component manufacturing and skill development

• India–EU FTA to boost electronics exports, aiming for $50 billion by 2031
• Deal grants preferential access to 99.6% of bilateral electronics trade
• FTA expected to drive investment, job creation, and tech collaboration in India

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The India–European Union Free Trade Agreement (FTA) is set to reshape India’s electronics sector, with industry estimates suggesting it could help scale exports to nearly $50 billion by 2031 across mobile phones, IT hardware, consumer electronics and emerging technology products — up from the current bilateral electronics trade of around $18 billion.

Over the following decade, exports could potentially cross $100 billion with deeper value-chain integration.

The agreement assumes significance as global supply chains increasingly prioritise resilience, diversification and trusted partnerships. It provides preferential access across 99.6% of bilateral electronics trade, effectively opening the EU’s $744 billion electronics market to Indian manufacturers at a time of global realignment.

Industry body ICEA described the pact as a “credible pathway” to accelerate export growth, anchored in expanded manufacturing capacity, job creation, innovation and India’s emergence as a reliable global supplier.

According to ICEA, India’s combination of scale, policy stability and a growing industrial base strengthens its position as a long-term manufacturing partner for European lead firms seeking alternatives to traditional supply centres. The FTA creates a structured framework for closer economic integration, encouraging European companies to anchor production and sourcing operations in India.

Lower trade barriers and improved regulatory alignment are expected to enable deeper collaboration across electronics, semiconductors, semiconductor manufacturing equipment, capital goods and other advanced manufacturing sectors. For Indian companies, participation in EU-led value chains offers access to advanced processes, equipment ecosystems and higher-value manufacturing activities.

“Over the coming decade, this alignment creates the foundation for a substantial expansion of electronics trade between India and the European Union, anchored initially in mobile phones and expanding across IT hardware, consumer electronics and emerging product categories,” said Pankaj Mohindroo, Chairman, ICEA. “For European lead firms, India offers a scalable and cost-efficient manufacturing base, while for India, the EU represents a high-value, standards-driven market that can anchor long-term export growth.”

Mohindroo added that the agreement reinforces India’s transition from scale-driven domestic production to export-oriented integration with global value chains. ICEA’s members include Apple, Foxconn, Tata Electronics, Xiaomi, Oppo, Vivo, Dixon and Bhagwati.

Analysts view the FTA as a structural catalyst for the ‘Make in India’ programme, effectively expanding the addressable market for domestic electronics manufacturing and deepening India’s global value-chain integration.

“We anticipate a significant pivot toward high-value exports in consumer electronics, IT hardware, and automotive and industrial electronics, supported by a stronger local component ecosystem,” said Tarun Pathak, Research Director at Counterpoint Research. “By neutralising the tariff advantage of competitors such as Vietnam and China, the agreement strengthens the PLI scheme as an export driver and advances the ‘China+1’ strategy for global supply chain leaders.”

Government officials expect the pact to spur investment-led growth across established electronics hubs including Bengaluru, Pune, Noida, Chennai and Hyderabad, with capacity expansion and fresh capital inflows likely as companies prepare for higher exports.

A key focus will be scaling production in high-value segments such as semiconductors, laptops and industrial equipment. Industry executives said tariff rationalisation and regulatory harmonisation could enhance India’s competitiveness as multinational firms diversify sourcing bases.

Beyond trade, the FTA is also expected to deepen collaboration in design, R&D, component manufacturing and skill development — seen as essential for moving India from assembly-led output to technology-intensive, higher-value exports.

Electronics has already emerged as one of India’s fastest-growing export categories, supported by production-linked incentive (PLI) schemes and expanding domestic capacity. The India–EU FTA could amplify this momentum by combining market access with investment and technology partnerships.

“We will need to go through the fine print in detail. However, I believe it will facilitate trade. I don’t see any negative impact — it should only have a positive effect. That said, we need to examine the specific line items, especially in electronics. Whatever we are currently exporting to Europe should benefit from a positive rub-off,” said JS Gujral, Managing Director, Syrma SGS Technology Limited.

Paritosh Prajapati, CEO of GX Group, said the agreement brings together complementary strengths. “India’s scale, speed and manufacturing depth combined with Europe’s advanced design, technology collaboration and standards leadership can create a durable industrial growth platform that extends well beyond trade volumes,” he said.