EU-India Free Trade Agreement: What Indian Exporters Should Prepare For

The EU-India Free Trade Agreement has been in negotiation for over a decade. Talks resumed seriously in 2022 and have been moving forward since. While no final deal is signed yet, the direction is clear enough that Indian exporters should be preparing now, not after the announcement.

What the FTA Would Change

An FTA between India and the EU would significantly reduce or eliminate import duties on a wide range of Indian goods entering the European Union. Currently, Indian exports to the EU face MFN tariffs ranging from 2 to 3% for engineering goods to 11.5% for textiles and up to 17% for some leather and footwear products. An FTA would bring many of these down to zero over a phased timeline, making Indian exports price-competitive against countries that already have FTAs with the EU such as Bangladesh and Vietnam in textiles.

Which Indian Sectors Stand to Gain Most

Textiles and apparel face the highest potential gain because Indian exporters currently compete with Bangladesh and Vietnam, both of which have preferential EU access. An FTA would level this playing field. Leather goods and footwear would benefit significantly given current duty levels. Engineering goods, chemicals, pharmaceuticals, and agro-processed products are also expected to see substantial duty reductions.

What You Should Be Doing Now

If you are exporting to Europe or planning to, there are three things to start on immediately. First, verify your HS code classification under the EU Combined Nomenclature because FTA benefits are claimed at the HS code level and wrong classification means you miss the preferential rate even when the deal is live. Second, get your RCMC and understand EU Rules of Origin requirements because FTA preferential rates apply only if your product meets the origin criteria for Indian manufacture. If your inputs are significantly imported, you need to check whether your product qualifies. Third, get your Certificate of Origin process clean because the buyer will need a valid COO from an authorised Indian issuing authority to claim preferential duty at European customs.

The Risk of Waiting

When the FTA goes live, the window of first-mover advantage for Indian exporters will be real but short. Buyers in Germany, France, Italy, and the Netherlands will actively look for Indian suppliers who can replace more expensive or less reliable sources. Exporters who have their registrations, documentation, and compliance ready will capture this demand. Those still figuring out their IEC six months after the announcement will miss it entirely.

Rasp International is actively preparing clients with EU export exposure for FTA readiness. Write to us at [email protected] to find out whether your product category stands to benefit and what you need to do to be positioned when the deal lands.