Indian garment exporters currently face duties of around 12 per cent in the European Union. The new agreement will bring Indian suppliers on par with competitors from Least Developed Countries (LDCs) and those covered under GSP frameworks. This long-awaited tariff parity is expected to unlock sourcing opportunities for global brands seeking sustainable and value-added supply chains, with India emerging as a natural alternative.
India’s textile and apparel industry expects a major boost from the India–EU FTA, which will eliminate the roughly 12 per cent duty on Indian garments and create tariff parity with key Asian competitors.
Industry leaders say the pact will unlock new EU sourcing opportunities, drive gradual export growth, attract investment, and strengthen India’s position as a sustainable, value-added supplier.
Sanjay Jain, Managing Director of TT Limited and chairman of the ICC National Textiles Committee, confirmed that his company will now focus more on the EU market. “TT Limited will grow in the European market as several global brands will turn to Indian garment companies. The FTA will provide huge opportunity. Indian exporters will get duty-free access. Currently, we are at a disadvantage due to the 12 per cent duty,” Jain told Fibre2Fashion. He added, “We cannot expect such big orders from the EU market as we get from the US, but Europe is more aligned with the Indian textile value chain. Buyers don’t need to go to other countries just for better pricing. It will take time to come into effect, but Indian exporters will grow gradually.”
Rahul Mehta, chief mentor of the Clothing Manufacturers Association of India (CMAI), termed the FTA a game changer. “The India – EU treaty will be a game changer for the textile sector, currently undergoing massive stress due to the US tariffs. It is now up to the industry to rise to the occasion to meet the other compliance requirements of the EU Markets. If we are able to get our factories, products, and compliances as required by the buyers, I see the potential to grow our exports by 25 per cent in the next couple of years,” Mehta noted.
Chandrajit Banerjee, director general of the Confederation of Indian Industry (CII), called the FTA a strategic breakthrough. “CII applauds the announcement of the India–European Union Free Trade Agreement. The unprecedented preferential access secured for over 99 per cent of Indian exports is a game-changer for Indian industry. It decisively improves competitiveness in the EU’s high-value market, anchors Indian manufacturers and service providers deeper into global value chains, and accelerates investment, technology inflows, and scale,” Banerjee stated. He highlighted that sectors like textiles and apparel, leather, gems and jewellery, and engineering goods will gain the most.
Durai Palanisamy, chairman of The Southern India Mills’ Association (SIMA), hailed the Prime Minister’s leadership in concluding the FTA. He stated, “The India–EU Free Trade Agreement would provide a significant boost to the Indian textile and clothing industry, with ready-made garments, home textiles, technical textiles, and fabrics emerging as the major beneficiaries.” He noted that India’s annual exports to the EU are valued at around $8 billion and that Tamil Nadu, with a 29 per cent share in textile exports to the EU, will be a key gainer.
Palanisamy added that Indian companies import around $3 billion worth of textile machinery from EU nations, and the FTA will also help reduce costs and improve competitiveness. He appealed for timely implementation of the pact within six to eight months to revive capacity utilisation and employment across textile clusters such as Tiruppur and Karur. “The FTA will be the game changer to achieve our textile vision of growing exports from $37 billion to $100 billion by 2030 and creating 20 million new jobs.” he concluded.
S C Ralhan, president of the Federation of Indian Export Organisations (FIEO), called the FTA a defining moment and a landmark national achievement that significantly enhances India’s export competitiveness. The agreement provides immediate and tangible gains, particularly empowering labour-intensive sectors, MSMEs, women entrepreneurs, and artisans, he said. With tariff elimination on nearly $33 billion worth of Indian exports and wide-ranging coverage including services, regulatory cooperation, and digital trade, Ralhan added that the deal perfectly aligns with the Government’s ‘Viksit Bharat 2047’ vision and strengthens India’s role in global trade leadership.
India’s garment industry sees this agreement not just as a tariff breakthrough but a strategic shift in market positioning. As the FTA moves towards operationalisation, exporters are expected to recalibrate supply chains, enhance ESG compliance, and invest deeper into the EU market, opening a new chapter for sustainable and inclusive export growth.
Fibre2Fashion News Desk (KUL)
