New Delhi: India and the European Union on Tuesday sealed the free trade agreement (FTA) pact on Tuesday. The trade deal will benefit the Indian garments and clothing industry as the the sector will will get zero-duty access to the European Union market. Notably, EU is the world’s largest apparel importer with total apparel import worth USD 202.8 billion in FY 2024-25.

Indian textile sector needed such big concessions as the players engaged in the sector were facing stiff competition against competitors like Bangladesh and Vietnam, industry bodies said on Tuesday. Currently, the United States is the biggest market for India’s textile and apparel exports, while European Union is placed at second spot.

The US which has imposed 50 per cent tariffs on Indian goods, accounts for almost 28 per cent of India’s textile and apparel exporters’ total revenue.

How India’s Apparel Exports will benefit from FTA with EU

Commenting in the India-EU trade deal, Apparel Export Promotion Council (AEPC) Chairman A Sakthivel said, “zero-duty access of Indian garments and clothing to the EU market will decisively turn the tables in India’s favour enhancing our competitiveness in the European market”.

Expressing his views on the ‘Mother of all trade deals’ Confederation of Indian Textile Industry (CITI) Chairman Ashwin Chandran, said the FTA between India and the 27-nation bloc in Europe will level the playing field for local textile and apparel exporters with their peers from Vietnam and Bangladesh.

“Coming at a time when India’s textile and apparel sector continues to be weighed down by the steep US tariff, the announcement on the FTA with the EU comes as a huge confidence boost since it creates possibilities for increased market access and more business to flow in for India’s textile and apparel exporters from the 27-nation bloc,” CITI Chairman Chandran stated.

Indian apparel exports could grow by 20-25 per cent year-on-year after the FTA comes into affect, Industry projections estimate.

AEPC Chairman Sakthivel noted, “The FTA eliminates tariff on 100 per cent of apparel tariff lines, which will enhance market access to all member countries of the EU.”

India’s total textile and apparel exports stood close to USD 38 billion in FY25.