India-EU FTA weaves new hope into $100 billion textile export dream

To double apparel exports to Europe from $5.5 billion to over $11 billion in five years

The proposed trade deal with the 27-nation European Union (EU) is expected to provide zero-duty access to the $95 billion European market for Indian textile and apparel manufacturers. Currently, India’s share of the European market is just 6 per cent, or $5.5 billion. Industry experts expect this could double to $11 billion over the next five years.

 

The deal could also play a crucial role in helping India achieve its ambitious target of $100 billion in textile and apparel exports by 2030, from $37.7 billion in FY25. This comes at a time when Indian exporters have been hit hard by increased tariffs in the US market. Knitwear hub Tiruppur alone is estimated to have suffered losses of ₹15,000 crore in 2025 due to higher US tariffs.

 

“Indian apparel exports could grow by 20-25 per cent year-on-year after the operationalisation of the FTA, against the current growth rate of 3.01 per cent in the EU market,” said A Sakthivel, Chairman of the Apparel Export Promotion Council (AEPC).

 

Of the $95 billion EU apparel market, China and Bangladesh together command more than 50 per cent. Bangladesh had an advantage in the region driven by duty-free, quota-free access under the Everything But Arms (EBA) initiative as a Least Developed Country (LDC). Other competitors with preferential duty access to the EU are Turkey and Vietnam.

 

“With duty-free access expected within a year, India’s apparel exports to the EU could grow at a 15 per cent compound annual growth rate, doubling to $11 billion over the next five years,” said Prabhu Dhamodharan, Convenor of the Indian Texpreneurs Federation (ITF).

 

In the current year, India, China, and Bangladesh grew 6-8 per cent in the EU apparel market, while Vietnam and Cambodia grew faster at 11-15 per cent, highlighting clear headroom for India, according to ITF data.

 

“Coming at a time when India’s textile and apparel sector continues to be weighed down by steep US tariffs, the announcement of the India-EU FTA is a huge confidence booster. It creates opportunities for greater market access and increased business flows from the 27-nation bloc,” said Ashwin Chandran, chairman of the Confederation of Indian Textile Industry (CITI).

 

Once operational, Chandran said, the India-EU FTA would level the playing field for Indian exporters vis-à-vis competitors such as Vietnam and Bangladesh, against whom India currently faces a tariff disadvantage in the EU.

 

“By removing the duty hurdle, the FTA will make Indian textile and apparel products more competitive in the European Union, which should potentially translate into higher revenues for our exporters,” he said. However, CITI cautioned that exporters must intensify their focus on innovation and sustainability to take maximum advantage of the FTA.

 

“Indian manufacturers are no longer operating at the 8-12 per cent tariff disadvantage that earlier constrained pricing in value and mid-market segments,” said Abhishek Dua, co-founder of Showroom B2B.

 

In December, India signed the Comprehensive Economic Partnership Agreement (CEPA) with Oman and concluded FTA negotiations with New Zealand. In July, India signed the Comprehensive Economic and Trade Agreement (CETA) with the United Kingdom.

 

Meanwhile, talks on a Bilateral Trade Agreement (BTA) with the US are ongoing. The 50 per cent US tariff on Indian goods, effective from August 27, 2025, has adversely affected many textile and apparel companies, raising concerns that millions of workers in the sector could lose their jobs and livelihoods.