The free trade agreement (FTA) between India and the European Union puts India on a level-playing field with a number of its competitors in a number of labour-intensive sectors such as textiles, apparel, leather goods, footwear, engineering goods, and marine products, India’s chief negotiator on the FTA Darpan Jain explained on Wednesday (January 28, 2026).
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In addition, while emphasising that the overall FTA will benefit all States in India, Mr. Jain also highlighted several sectoral benefits to States such as Tamil Nadu, Andhra Pradesh, Karnataka, Kerala, Gujarat, Maharashtra, Rajasthan, Uttar Pradesh, Bihar, Odisha, and West Bengal.
India and the EU on Tuesday (January 27, 2026) signed a document marking the conclusion of negotiations on an FTA that both sides have dubbed the ‘mother of all deals’.
Textiles sector to benefit
“Duty-free access from an earlier duty of up to 12% in textiles, apparel and clothing provides a level playing field for exporters and boosts India’s competitiveness in the EU vis-a-vis competitors such as Bangladesh, Vietnam, and Turkey, which enjoy duty-free or preferential access under EU trade agreements,” Mr. Jain said.
Under the deal, duties on leather goods, footwear, textiles, apparel, and clothing will be entirely removed as soon as the FTA comes into force.
“Key clusters in Tamil Nadu, Gujarat, Maharashtra, Rajasthan, Uttar Pradesh, Bihar, and West Bengal are set to see capacity expansion and development,” Mr. Jain asserted.
Engineering gains an edge
In the engineering sector, Mr. Jain said India would gain a competitive edge over its competitors such as China, the United Kingdom, the U.S., Vietnam, and Turkiye as India has managed to secure “preferential access” and reduced tariffs under the FTA.
This, he said, is expected to help States like Maharashtra, Tamil Nadu, Gujarat, Karnataka and Andhra Pradesh to adopt advanced technologies, scale up operations, and strengthen MSME networks.
The electronics sector is set to benefit in similar fashion, Mr. Jain explained.
“The FTA reduces existing tariffs of up to 14% and opens 99.6% of India-EU electronics trade, creating a level playing field against global competitors like China, US, Taiwan, and Vietnam,” he said, adding that this stands to benefit hubs in Bengaluru, Pune, Noida, Chennai, and Hyderabad.
Coastal States get advantage
The marine sector will see 94.4% of marine exports to the EU see duties entirely eliminated as soon as the FTA comes into force, down from a current tariff rate of up to 26%. Another 1.9% of exports will see tariffs being eliminated in phases.
“The FTA removes the duty disadvantage faced by Indian marine exports with regard to countries like Morocco, Ecuador, and Vietnam, which enjoy duty-free or preferential access,” Mr. Jain said.
States that are set to benefit from this are the ones with strong coastal clusters such as Tamil Nadu, Andhra Pradesh, Kerala, Gujarat, Odisha and West Bengal, he added.
He further said that the FTA would improve India’s competitiveness in the pharmaceuticals and medical devices sectors against competitors such as the US, China, and Japan, to the benefit of MedTech hubs in Telangana, Karnataka, Andhra Pradesh, Maharashtra, and Gujarat.
Published – January 28, 2026 07:17 pm IST
