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EU Trade Deal Levels Playing Field for Indian Textiles Against Rivals

The India-EU Free Trade Agreement will eliminate EU import duties on Indian textiles, removing a key competitive disadvantage against rivals like Bangladesh and Vietnam. The deal is expected to boost India's apparel and home textile exports by enhancing price competitiveness for European retailers. This comes as India's apparel exports to the EU have stagnated due to weak retail demand and inflation. The agreement is seen as a structural catalyst for export growth and greater integration into global supply chains.

Key Points: EU FTA to Boost Indian Textile Exports, Rival Bangladesh & Vietnam

  • Zero EU import duties on Indian textiles
  • Addresses longstanding tariff disadvantage
  • Boosts apparel and home textile segments
  • Strengthens position in European supply chains
2 min read

EU FTA to put Indian textiles on level-playing field with Bangladesh, Vietnam

New India-EU trade agreement eliminates duties, boosting competitiveness for textiles and apparel against key rivals like Bangladesh and Vietnam in the European market.

"Duty elimination is likely to enhance price competitiveness, support greater sourcing opportunities from European retailers - ICRA Report"

New Delhi, Feb 7

The India-EU Free Trade Agreement eliminates duties and places Indian shipments on a level-playing field with key competitors such as Bangladesh and Vietnam, among other preferential trade partners, according to a new report.

The agreement is expected to bring down EU import duties on Indian textiles to zero, addressing a longstanding tariff disadvantage that had limited India's competitiveness in the region.

The ICRA report notes that preferential access and lower tariffs previously enabled competing countries to maintain a stronger foothold in the EU market, while Indian exporters faced structural pricing constraints.

The EU's import dependence on India has historically remained below 5 per cent, with China, Bangladesh, Turkey and Vietnam leading supplies to the region.

Preferential trade access and lower tariffs had placed Indian exporters at a structural disadvantage prior to the agreement.

India's apparel exports are estimated at over $16 billion in 2025, with nearly one-third going to the US and around 23 per cent to the EU, making Europe one of the largest export destinations for the sector.

However, exports to the EU have remained largely flat in recent years due to sluggish retail demand, inflationary pressures and vendor diversification by global buyers, said the ICRA report.

The India-EU FTA is expected to be particularly beneficial for apparel and home textile segments, which stand to gain from tariff-free access, it added.

"Duty elimination is likely to enhance price competitiveness, support greater sourcing opportunities from European retailers and strengthen India's positioning within European supply chains. The report highlights that the agreement could act as a structural catalyst for export growth, improved competitiveness and long-term investments across the textile value chain," said the report.

The wide-ranging market access is likely to strengthen labour-intensive sectors, including textiles, while enhancing India's integration into global value chains.

- IANS

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Reader Comments

R
Rohit P
Finally! We've been talking about this for years. Bangladesh and Vietnam had a huge unfair advantage. Now our quality and craftsmanship can compete on price too. Hope this translates to more jobs and better wages in states like Tamil Nadu and Gujarat.
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Aman W
Good step, but the report also mentions sluggish demand and inflation in Europe. Zero duty is one thing, but we need European consumers to have money to spend. Also, our industry needs to upgrade infrastructure and focus on sustainability to truly compete long-term.
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Sarah B
As someone who works in international trade, this is a significant strategic move. Integrating better into EU supply chains can bring in much-needed technology and investment. The key will be ensuring the benefits reach the smaller players and aren't just captured by large exporters.
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Karthik V
Jai Ho! Our weavers and artisans deserve this break. From Kanchipuram silks to Punjab's phulkari, we have so much to offer. Hope this agreement includes protections for our traditional handicrafts and doesn't just favour mass-produced apparel.
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Michael C
The timing is interesting with global buyers diversifying away from China. If Indian exporters can ensure consistent quality and meet EU compliance standards on time, this could be a massive opportunity. The "Make in India" push gets a real boost.

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