FTA WITH EU TO HELP BOOST INDIA’S EXPORTS

NEWS: India and the European Union (EU) are negotiating a free trade agreement (FTA). Negotiations have reached the final stage. If finalised, this will be the 19th trade deal for India. The FTA is expected to help boost the country’s exports to the 27-nation bloc.

India–EU FTA:

Comprehensive trade pact aimed at reducing or eliminating tariffs, aligning regulations, opening services markets, and facilitating investment between India and the 27-nation European Union.

Benefits for India and the EU

• Tariffs or import duties are either reduced or eliminated under an FTA.
• FTA will open markets, align regulations between the two, and benefit key industries like technology, pharmaceuticals, automobiles, and textile
• Lower duties will make Indian exports, including from labour-intensive sectors, such as garments, leather, pharmaceuticals, more competitive in the EU.
• According to think tank GTRI, the EU will benefit from higher exports of aircraft and parts, electrical machinery, diamonds, and chemicals to India

Bilateral Trade

• India’s bilateral trade in goods with the EU was USD 136.53 billion in 2024-25 (exports worth USD 75.85 billion and imports USD 60.68 billion)-> largest trading partner for goods.
• The EU market accounts for about 17 per cent of India’s total exports, and the bloc’s exports to India constitute 9 per cent of its total overseas shipments.
• As per reports, the EU, with a GDP of about USD 19.5 trillion and a population of over 450 millionà major global trade player, exporting about USD 2.9 trillion and importing more than USD 2.6 trillion annually.
• India, with a population of 1.4 billion, exported USD 437 billion in goods and USD 387.5 billion in services. It imported goods worth USD 720 billion and USD 195 billion worth of services in 2024-25.

The India–EU FTA is not just a trade deal but a strategic economic partnership with the world’s largest trading bloc. If concluded on balanced terms, it can accelerate India’s export-led growth, attract high-quality investment and integrate India into European supply chains, strengthening India’s position in a fragmented global economy