EU test: Converting access to market share

India’s share in EU imports remains around 1 per cent. That is the real baseline. The FTA addresses access preferential entry across roughly 97 per cent of EU tariff lines covering nearly 99 per cent of trade value.¹ While this strengthens India’s position, we need to continue working on enhancing our competitiveness by effectively evolving our domestic capabilities.

For labour-intensive sectors such as textiles, leather, gems and jewellery and marine products, tariff removal offers immediate price advantage. Going ahead, sustaining momentum will require aligning with the evolving expectations of the EU market.

Access opened the door. What happens next depends on how India walks through it.

The FTA, therefore, is less about incremental export gains and more about correcting a structural gap in India’s presence in one of the world’s most sophisticated markets.

The real shift lies beyond tariff cuts. The agreement enables Indian firms to integrate into European value chains, where scale, quality and reliability matter more than cost alone.

The opportunity pools are large. Chemicals alone represent a USD 500 billion import market in the EU, while textiles and apparel account for over USD 260 billion.² While market entry is guaranteed, market retention will depend on meeting evolving demand and moving up the value chain.

This is where targeted action can make a difference. Investing in product innovation, building partnerships with European firms and developing sector-specific clusters can help Indian companies anchor themselves.

Services add a second engine. Access to 144 EU services subsectors, combined with a mobility framework, strengthens India’s position in business, technology and professional services.³ This dual play across goods and services gives the FTA its strategic depth.

The FTA is not a one-way export story. Phased duty reductions on advanced machinery, medical equipment and aircraft parts will lower input costs and accelerate technology adoption.

This matters. Competitiveness in global trade is increasingly driven by the quality of inputs and integration with global supply chains. Lower-cost access to European technology can help Indian manufacturing move up the value curve.

Imports, in this context, are not a threat. They are a lever to upgrade domestic capabilities and embed India deeper into global production systems.

What sets this agreement apart is its non-trade architecture. Cooperation spans security, defence, clean energy, critical technologies and intellectual property.

Technology partnerships in areas such as AI and semiconductors, alongside climate collaboration, indicate that this is designed as a long-term economic partnership. Regulatory alignment and stronger IP protection further improve investor confidence and reduce friction.

This is closer to a strategic compact than a traditional FTA.

If tariffs were the barrier of the past, regulation will define the future. EU frameworks such as the Carbon Border Adjustment Mechanism and deforestation-linked rules will directly shape export viability. This shift is not just about meeting standards but about embedding them early in product design and sourcing decisions.

Execution will determine outcomes. Rules of origin, quality standards, certification systems and supply chain traceability are no longer compliance checkboxes but market-entry conditions.

For Indian exporters, the shift is clear: from cost arbitrage to standards-led competitiveness.

Policy access must now translate into commercial scale. This requires investment in compliance systems, sustainability practices and workforce skills.

What becomes critical now is building shared infrastructure – common testing facilities, digital traceability platforms and sector-led compliance frameworks – to reduce the burden on individual firms.

MSMEs, in particular, will need support to align with EU standards while maintaining cost competitiveness. Targeted financing, capacity-building programmes and industry-government coordination can help accelerate this transition. These steps can help ensure complete utilisation of tariff liberalisation benefits.

The India–EU FTA is more than a trade agreement. It is a platform to reposition India within global value chains and deepen engagement with advanced economies. While now that scale is guaranteed, we must continue enhancing our competitiveness.

The next step is to ensure that the Indian industry moves fast enough, on standards, on technology and on execution to match the opportunity this agreement creates.