India-EU FTA Set to Significantly Boost Indian Exports Across Key Sectors: ICRA

Published By DPRJ Universal | Published on Saturday, 7 February 2026

India's recently concluded Free Trade Agreement with the European Union is projected to deliver substantial gains for multiple Indian sectors, including textiles, pharmaceuticals, chemicals, and agriculture, according to ICRA. The agreement eliminates tariffs on over 90% of goods, granting India preferential zero-duty access on 97% of EU tariff lines. This move is expected to enhance India's export competitiveness, foster investment, and significantly increase bilateral trade with the EU, a crucial trade partner.

India's newly finalized Free Trade Agreement (FTA) with the European Union, concluded in January 2026, is anticipated to be a major catalyst for Indian exports, benefiting a diverse range of sectors. Credit rating agency ICRA's analysis highlights that the agreement will eliminate tariffs on over 90% of goods traded, providing India with preferential zero-duty access on 97% of EU tariff lines, covering nearly 99.5% of its export value. In return, India will reduce or eliminate tariffs on 92% of EU imports.Key beneficiaries include the textile and apparel sector, which will gain duty-free access, placing Indian exporters on par with rivals like Bangladesh and Vietnam. The pharmaceutical and healthcare product sectors are also set to thrive, with the removal of EU import tariffs boosting export competitiveness and reducing domestic healthcare costs. Indian chemical companies are expected to improve their market position against global competitors, particularly in the EU, a significant destination for organic chemical exports.Additionally, agricultural and processed food exports, along with labour-intensive sectors such as leather, footwear, and furniture, will enjoy enhanced market access and tariff reductions. While engineering goods will also benefit, finished steel exports may still face challenges due to the EU's Carbon Border Adjustment Mechanism (CBAM). The FTA is poised to strengthen India's competitiveness, safeguard MSMEs and farmers, and elevate bilateral trade beyond the current USD 137 billion, driving investment, innovation, and job creation.