India-EU FTA to unlock $75B in exports, create millions of jobs
India-EU FTA to unlock $75B in exports, create millions of jobs
New India-EU free trade pact promises zero tariffs for labour-intensive sectors, aiming to boost exports and create millions of jobs, with operation target set for 2026.
The India-EU free trade agreement is billed as a major push to boost exports amid a turbulent global trade order. It targets zero duties for labour-intensive sectors such as textiles, leather, marine products, gems and jewellery, helping India tap into the EU market while shielding it from US tariff pressures. The deal is expected to unlock about $75 billion in fresh exports to the EU, including roughly $33 billion from labour-intensive segments, and could generate 6-7 million new jobs if textiles exports rise from around $7 billion to as much as $35-40 billion.
Officials say the pact could be operational in 2026, with duty-free access on key labour-intensive goods from day one. It also envisions a phased reduction of tariffs on cars—tariffs could fall from a peak of 110% to around 10% over five to ten years, with auto components following suit. For now, the EU’s Carbon Border Adjustment Mechanism (CBAM) will remain applicable.
The bilateral trade picture was $136.54 billion in merchandise trade in 2024-25, with India exporting about $75.85 billion to the EU and services trade at $83.10 billion in the same period. The two sides aim to double bilateral trade by 2032, with manufacturing and a broader base of exports expected to benefit across textiles, apparel, marine, leather, footwear, chemicals, plastics, sports goods, gems and jewellery, and more.
