India-EU TA to Lift Exports, Boost State Economies

The India–European Union Free Trade Agreement is expected to significantly deepen economic engagement between the two partners, with Indian exports to the EU projected to rise by nearly ₹6.4 lakh crore. Officials said the agreement will expand market access across sectors, delivering benefits to small industries, farmers, students, and skilled professionals by reducing tariffs and easing regulatory barriers.

The agreement eliminates tariffs across 9,425 product categories and improves regulatory access, opening major opportunities for labour-intensive sectors such as textiles, apparel, leather, gems and jewellery, handicrafts, and agricultural exports including tea, spices, and marine products. At the same time, high-technology manufacturing sectors such as engineering goods, electronics, pharmaceuticals, and medical devices are expected to significantly expand their footprint in European markets.

State-wise impact of the India-EU FTA

Maharashtra
Maharashtra is set for major export gains as textile tariffs drop from 12% to zero and electronics tariffs fall from 14% to zero on nearly all exports. Garment clusters in Ichalkaranji, engineering and electronics hubs in Pune, pharmaceutical units in Thane-Raigad, and gems and jewellery exporters in Mumbai are expected to scale up EU shipments.

Gujarat
Gujarat’s export-oriented industrial ecosystem stands to benefit across integrated supply chains. Surat is poised to expand textile, diamond, and jewellery exports, while Bharuch and Vadodara gain as tariffs on most chemical exports fall to zero. Engineering goods from Rajkot and marine exports from Veraval are also expected to rise.

Tamil Nadu
Tamil Nadu’s globally competitive labour-intensive clusters are among the biggest beneficiaries. Apparel exports from Tiruppur gain competitiveness as textile tariffs are eliminated, while leather and footwear exporters in Vellore and Ambur benefit from tariff cuts of up to 17%. Engineering and electronics corridors in Chennai and Coimbatore are set to deepen trade linkages with the EU.

West Bengal
West Bengal’s gains are closely linked to livelihoods. Darjeeling tea from North Bengal receives improved access, while seafood exports from Digha and Haldia benefit from reduced tariffs that currently go up to 26%. Traditional handicrafts are also expected to see higher demand.

Assam
Assam benefits through tea, spices, and artisan exports. Tea from Dibrugarh and Jorhat, spices from Upper Assam, bamboo-based furniture, handicrafts, and niche pharmaceutical products gain easier entry into premium EU markets.

Kerala
Kerala’s economy sees gains through marine and spice exports that support farmer and fisher incomes. Shrimp and tuna exports from Kochi and Alappuzha are expected to rise, while pepper and cardamom from Idukki and Wayanad gain wider market access.

Karnataka
Karnataka is well-positioned to translate preferential access into advanced manufacturing growth. Engineering goods, electronics, and pharmaceuticals from Bengaluru and Tumakuru gain momentum, supported by MSME suppliers. Apparel exports from Bengaluru are also expected to expand, supporting job creation.

Andhra Pradesh
Andhra Pradesh’s coastal economy receives a boost as shrimp and seafood exports increase from Visakhapatnam and Kakinada. The state is also set to expand pharmaceutical and electronics exports, strengthening its manufacturing base.

Telangana
Telangana benefits across textiles and high-value manufacturing. Apparel exports from Hyderabad and Warangal are expected to grow, while Hyderabad strengthens its role as a hub for pharmaceuticals, electronics, medical devices, and engineering goods.

Punjab
Punjab’s MSME-driven clusters gain from increased EU demand. Garments and knitwear from Ludhiana, sports goods from Jalandhar, and light engineering products from Mandi Gobindgarh are expected to see export growth.

Rajasthan
Rajasthan’s craft-based export clusters are set to benefit from improved access. Jewellery from Jaipur, wooden furniture and handicrafts from Jodhpur, along with textiles, leather products, and sports goods, are expected to find stronger demand in EU markets.

Uttar Pradesh
Uttar Pradesh emerges as a major job creator under the FTA. Leather footwear from Kanpur and Agra, furniture and handicrafts from Saharanpur, electronics from Noida, and agricultural products from western UP are all expected to see export gains.

Overall, the India–EU Free Trade Agreement provides a state-wise pathway to scale India’s most competitive export clusters, combining job-intensive manufacturing, agriculture-linked exports, and high-value industrial growth.