The India-EU Free Trade Agreement (FTA) has been drawing rich raves and naturally so. As various reports highlighted, the deal should drive trade growth past the $136 billion mark achieved in 2024-25.
Gujarat stands among the greatest beneficiaries in this deal. Its export sector is set for a major lift-off and here is why.
Industry insiders believe the pact could double Indian exports in just three years in sectors like textiles, pharmaceuticals, chemicals, and engineering by cutting tariff hurdles.
Gujarat has a strong manufacturing base and port connectivity. Naturally, it’s expected to be one of the biggest winners.
According to reports, the changing geopolitical winds have opened doors that were previously bolted shut. Exporters can serve clients across multiple global markets instead of putting all their eggs in one basket.
Sectors such as pharmaceuticals, chemicals, textiles, engineering, and both natural and lab-grown diamonds are seeing strong demand in Europe.
Textiles Get A Leg Up
The textile sector could be the biggest beneficiary, with the FTA improving price competitiveness and market access just as global sourcing patterns are doing a merry dance. Lower duties and clearer regulations are expected to nudge companies toward higher-value and sustainable manufacturing instead of chasing sheer volume.
Industry observers believe the agreement removed a long-standing headache for Indian exporters in Europe and described the deal as opening a unified market of nearly 2 billion consumers. Predictable access and alignment with European sustainability norms would give a much-needed boost to value-added manufacturing, man-made fibres, and processing, areas where India had been running on fumes.
Media reports added that India’s textile and apparel exports to the EU grew at a 6.6% CAGR since 2020-21, reaching $7.6 billion in 2024-25. Readymade garments account for nearly 60% of exports. The FTA is expected to accelerate growth even further.
Gujarat’s chemical makers are also rubbing their hands with glee. They believe that import duties of up to 18% on Indian chemical products would mostly vanish. Most of India’s chemical exports to the EU would move to a duty-free regime.
This would give the country an opportunity to compete more effectively with China.
However, business analysts also reminded that Indian chemical exports to the EU had declined from $5.34 billion in 2022-23 to $4.43 billion in 2024-25 on account of geopolitical twists.
Why Pharma Intermediates Will Have The Last Laugh
The pharmaceutical sector expects limited gains for finished drugs, which already enter Europe largely duty-free. But intermediates and key raw materials are set to cash in now. Furthermore, experts are confident that the FTA would help boost exports of pharma intermediates and key starting materials (KSMs). Smoother and more predictable market access is a bonus.
Also Read: $4.75 Bn Free Trade Deal Marks New Era In India-EU Relations https://www.vibesofindia.com/4-75-bn-free-trade-deal-marks-new-era-in-india-eu-relations/
