While much of the attention around the India–EU free trade agreement has centred on automobiles and other headline sectors, textiles and apparel could quietly emerge as one of the biggest winners of the deal.
The sector stands to gain immediate and tangible relief under the agreement, with changes that directly improve India’s competitiveness in one of the world’s largest consumer markets. Under the India–EU FTA, tariffs on Indian textiles, apparel and clothing will be reduced to zero from day one. Until now, Indian exports in this segment faced EU duties of up to 12 per cent.
This tariff disadvantage has long weighed on India’s ability to compete with rivals such as Bangladesh, Pakistan and Turkey, which already enjoyed lower or zero-duty access to the European market.
“The textile chapter of the India–EU FTA addresses a long-standing imbalance in market access that has constrained India’s most employment-intensive export sector,” said Jidesh Kumar, Managing Partner at King Stubb & Kasiva, Advocates and Attorneys. “Indian textile and apparel exports currently attract EU tariffs of up to 12 per cent, while competing suppliers benefit from preferential trade regimes.”
He added that a rules-based removal of tariffs would restore competitive parity and provide long-term certainty to investors and global buyers.
With duties eliminated across all textile and apparel tariff lines, India now has a clearer path into the EU’s textile and apparel import market, estimated at $263.5 billion. The European Union is already India’s second-largest destination for textile and apparel exports after the United States, but India’s market share has remained modest so far.
A large gap — and a major opportunity
India currently exports around $7–7.2 billion worth of textiles and apparel to the EU, a small fraction of the bloc’s total imports. That gap underlines the scale of the opportunity opened up by the trade deal.
Commerce and Industry Minister Piyush Goyal has said the agreement gives India a realistic chance to sharply scale up exports. “Bangladesh captured a $30 billion share of the EU textile market largely because it had zero duties. With the India–EU FTA, India can now compete and win,” he said, adding that exports to Europe could eventually reach $30–40 billion.
Ready-made garments at the core
Ready-made garments form the backbone of India’s textile exports to the EU, accounting for nearly 60 per cent of shipments. Cotton textiles make up about 17 per cent, while man-made fibre products account for roughly 12 per cent.
The remainder consists of handicrafts, carpets, jute, woollen goods, handlooms and silk products—segments that are highly labour-intensive and dominated by MSMEs.
The Ministry of Textiles has described the FTA as a transformational step for the sector, noting that zero-duty access will improve price realisation and expand opportunities in a key global market.
Jobs, MSMEs and regional clusters
Textiles employ around 45 million people directly in India. Improved access to the EU market is expected to lift production, raise capacity utilisation and support employment across MSME clusters.
Exports to the EU already originate from 342 districts across the country. Major garment hubs include Tiruppur, Bengaluru and the Gurugram–Faridabad belt. Cotton textiles and home furnishings are centred in Karur, Panipat and Ahmedabad, while man-made fibre and synthetic textiles are led by Surat, Dadra and Nagar Haveli, and Mumbai.
Traditional segments such as handicrafts, handlooms, carpets, jute and silk are spread across clusters in Uttar Pradesh, Rajasthan, West Bengal, Karnataka and Bihar.
Industry players expect duty-free access to encourage fresh capacity expansion across states including Tamil Nadu, Gujarat, Maharashtra, Rajasthan, Uttar Pradesh, Bihar and West Bengal, with a direct impact on employment for artisans, weavers and women workers.
Learning from global peers
India’s expectations are informed by global examples. Vietnam, which signed a free trade agreement with the EU in 2019, has seen its textile exports to Europe grow to around $14–16 billion, with annual growth rates close to 20 per cent.
Bangladesh, despite recent challenges, remains a key EU supplier largely due to its long-standing zero-duty access.
At a time when global buyers are looking to diversify supply chains and reduce over-dependence on a few countries, exporters believe the timing of the India–EU FTA works in India’s favour.
Beyond tariff cuts, the agreement also seeks to address non-tariff barriers through smoother customs procedures, regulatory cooperation and clearer trade rules. For textile exporters—especially MSMEs—this could reduce delays and compliance costs, making exports more predictable.
Overall, while several sectors may see gradual or limited gains from the India–EU deal, textiles and apparel stand out for their immediate and structural advantages. Without much fanfare, the industry may well turn out to be one of the clearest beneficiaries of the agreement.