India–EU FTA’s Zero-Duty Access To Level Playing Field For Indian Textile Exporters In EU Market

New Delhi, Jan 28 (KNN) The India–European Union (EU) Free Trade Agreement (FTA) opens new opportunities for Indian textile and apparel exporters in the European market.

Under the FTA, India is set to gain zero-duty access for textiles and clothing across all tariff lines, with tariff reductions of up to 12 per cent.

Indian textile exporters currently face 10-12 per cent duty in the EU market as against its key rivals which get zero-duty access.

“It is a historic moment and will be a game changer for the Indian textile industry. As India already has a significant presence in the EU, duty-free access will create a level playing field to compete with Bangladesh, which already enjoys duty-free access. This will provide a definite boost to India’s exports of apparel and textile products,” said Dr Animesh Saxena, Past President, Federation of Indian Micro and Small & Medium Enterprises (FISME).

EU a Key Market for Indian Textiles

The EU is India’s second-largest export destination for textiles and apparel, after the United States. In 2024, the EU’s global imports of textiles and apparel stood at USD 263.5 billion, highlighting the size and long-term potential of the market for Indian exporters. 

India’s textile exports to the EU have recorded steady growth over the past five years and are spread across multiple value-added and labour-intensive segments.

Ready-made garments account for around 60 per cent of India’s textile exports to the EU, followed by cotton textiles (17 per cent), man-made fibre and MMF textiles (12 per cent), and smaller but significant shares from handicrafts, carpets, jute products, woollens, handlooms and silk. 

Zero-Duty Access and Expanded Market Reach

The  zero-duty access would open access to the EU’s Rs 22.9 lakh crore (USD 263.5 billion) textile import market. At present, India exports about Rs 62,700 crore (USD 7.2 billion) worth of textiles and apparel to the EU, out of its total global exports of Rs 3.19 lakh crore (USD 36.7 billion).

The agreement is expected to significantly expand opportunities in yarn, cotton and man-made fibre apparel, ready-made garments, men’s and women’s clothing, and home textiles. 

Industry observers say this will enable MSMEs to scale operations, generate employment and strengthen India’s position as a reliable and sustainable sourcing partner.

Addressing Tariff Disadvantages

The FTA corrects a long-standing tariff disadvantage faced by Indian exporters compared with competitors such as Bangladesh, Pakistan and Turkey, which enjoyed preferential or duty-free access to the EU market. 

By enhancing price competitiveness, the agreement is expected to provide a decisive boost to labour-intensive sectors in one of the world’s most demanding consumer markets.

(KNN Bureau)