Industry welcomes 'game-changer' India-EU FTA, sees big boost for trade and jobs

Indian industry bodies have welcomed the conclusion of the India–European Union free trade agreement (FTA), calling it a landmark step that could significantly boost trade, investment and employment, particularly in labour-intensive sectors.

The agreement was announced on Tuesday, January 27, following high-level engagements between India and the European Union, alongside the signing of a broader strategic and security partnership. The FTA is expected to be operationalised by 2027 and is aimed at deepening economic ties between two major economies.

Reacting to the development, the Confederation of Indian Industry (CII) said the pact marks a strategic breakthrough in India’s global trade engagement.

Chandrajit Banerjee, Director General, CII, in a statement said, “CII applauds the announcement of the India–European Union Free Trade Agreement announced today. This landmark agreement represents a strategic breakthrough in India’s global trade engagement and significantly deepens the partnership between two major democracies and economies that together account for nearly 25% of global GDP.”

Highlighting the scale of market access secured under the deal, Banerjee said, “The unprecedented preferential access secured for over 99% of Indian exports is a game-changer for Indian industry. It decisively improves competitiveness in the EU’s high-value market, anchors Indian manufacturers and service providers deeper into global value chains, and accelerates investment, technology inflows, and scale.”

According to CII, key sectors set to benefit include textiles and apparel, leather and footwear, gems and jewellery, marine products, engineering goods, automobiles, agriculture and processed foods, IT and IT-enabled services, and other business and professional services.

Emphasising the employment impact, Banerjee added that the agreement delivers “tangible gains for labour-intensive sectors and MSMEs” and, with its mobility provisions, “lays a foundation for sustained, inclusive, and globally competitive growth which is fully aligned with India’s vision of Viksit Bharat @2047.”

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The Federation of Indian Chambers of Commerce and Industry (FICCI) also welcomed the pact, describing it as an agreement of long-term strategic significance.

Anant Goenka, President of FICCI said, “Congratulations to the Government of India for advancing an agreement of strategic scale and long-term significance under the leadership of Hon’ble Prime Minister Shri Narendra Modi.”

Goenka noted that the European Union represents the largest and most high-potential market covered under India’s recent free trade agreements. He added that the FTA is expected to unlock substantial untapped trade and investment opportunities by enabling deeper market access, stronger value-chain integration and enhanced export competitiveness across manufacturing and high-value sectors.

Adding a corporate perspective from the automotive sector, Santosh Iyer, Managing Director and CEO of Mercedes-Benz India, told PTI, “The Indo–EU FTA is a historic achievement for India and reiterates the rising relevance of the Indian economy at a global stage.”

He added that the agreement is expected to “strongly drive technological innovation and sustainable growth within the Indian automotive sector, with a sharp focus on future mobility.”

However, Iyer cautioned, “The final implications of the FTA can only be determined once the fine print of the agreement is available to us.”

Reiterating Mercedes-Benz ’s support for trade liberalisation, Iyer said, “With the Indo–EU FTA, India’s economic growth should get a strong boost as borders open up, presenting opportunities in new markets, fostering bilateral trade, and creating job opportunities.”