As India and the European Union prepare to announce a long-anticipated Free Trade Agreement (FTA) on January 27, optimism is growing within the Indian textile industry that the pact will remove or dramatically reduce duties on textile exports, creating a significant competitive advantage in one of the world’s largest markets. Industry leaders, including Raymond Group Managing Director Gautam Singhania, see this agreement as a potential game-changer not only for textiles but also as a catalyst that could pull the United States back into the global trade negotiation sphere.

Under the proposed FTA framework, India aims to secure zero-duty access for textile and apparel products entering the 27-member European bloc, a move that could reverse the competitive disadvantages created when the EU suspended Generalised Scheme of Preferences (GSP) benefits for Indian goods earlier this year. Those benefits had previously helped Indian textiles compete with products from Bangladesh and Vietnam, which enjoy nearly duty-free access. With Indian exports now facing tariffs of roughly 10-12% in the EU market compared with near-zero duties for competitors, securing duty elimination is viewed as critical to restoring export momentum and safeguarding jobs in the labour-intensive textile sector.

Analysts and trade bodies argue that duty-free access under the FTA would not only help India regain lost ground but also expand its share of the European market. This could translate into a surge in exports across the textile value chain—from cotton and yarn producers to garment manufacturers—boosting revenue and supporting millions of jobs linked to these industries. The Apparel Export Promotion Council and Cotton Textiles Export Promotion Council have stressed that zero-duty access is vital for rural artisans and MSME exporters, helping strengthen supply chains and encourage value-added exports.

Beyond textiles, the trade deal promises to stimulate broader economic engagement between India and the EU, covering goods, services, and strategic cooperation. It is expected to benefit sectors such as gems and jewellery, auto components, and engineering goods, while setting a foundation for deeper economic integration. Experts project that bilateral trade could grow significantly, potentially boosting India’s trade surplus with the EU and reinforcing the bloc’s role as a key economic partner.

Singhania’s comments also highlight the geopolitical implications of the FTA. A favourable outcome for India in the EU negotiations could place pressure on the United States to revisit its own trade policy with India, especially at a time when global supply chains and trade alliances are being reshaped. This strategic dimension underscores how trade agreements can extend beyond tariff schedules to influence international economic diplomacy.

As the two sides prepare to conclude nearly two decades of negotiations, the FTA is being seen as a landmark achievement in India’s trade policy. Success in this deal could not only enhance export competitiveness but also serve as a blueprint for India’s engagements with other major economies, redefining its role in the global trade landscape in the years ahead.