India-EU Trade Deal Gives Textile & Apparel Sector Zero-Duty Access, Unlocks $263 Billion EU Market

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India-EU Trade Deal Gives Textile & Apparel Sector Zero-Duty Access, Unlocks $263 Billion EU Market

India’s textile and apparel sector is set to be one of the biggest winners of the India-EU Free Trade Agreement, with tariffs dropping to zero from day one. The move removes a long-standing competitive disadvantage, opens access to the EU’s $263.5 billion textile market and could help India scale exports to $30–40 billion while boosting jobs across MSME and manufacturing clusters.

Published by Somesh | January 28, 2026

While much of the attention around the India-EU Free Trade Agreement has focused on automobiles and other high-profile sectors, textiles and apparel are emerging as one of the deal’s most significant beneficiaries. Under the agreement, tariffs on Indian textiles, apparel and clothing exports to the European Union will be eliminated from day one, ending duties that previously ranged up to 12%.

This immediate tariff relief corrects a long-standing disadvantage faced by Indian exporters compared to competitors such as Bangladesh, Pakistan and Turkey, which already enjoyed preferential or zero-duty access to the EU market. According to Jidesh Kumar, Managing Partner at King Stubb & Kasiva, the rules-based tariff elimination restores competitive neutrality while offering long-term certainty to investors and global buyers.

The opportunity is substantial. The EU’s textile and apparel import market is valued at $263.5 billion, while India currently exports only $7–7.2 billion worth of textiles and garments to the region. Commerce and Industry Minister Piyush Goyal has said the India-EU FTA gives India a real chance to sharply expand its market share, pointing to Bangladesh’s $30 billion EU export success driven largely by zero-duty access.

Ready-made garments form the backbone of India’s textile exports to Europe, accounting for around 60%, followed by cotton textiles and man-made fibre products. The sector is highly labour-intensive, employing nearly 45 million people directly and supporting thousands of MSMEs across 342 districts nationwide.

Major apparel hubs such as Tiruppur, Bengaluru and Gurugram-Faridabad, along with textile clusters in Surat, Panipat, Karur, Ahmedabad and Mumbai, are expected to benefit from increased orders and improved capacity utilisation. Traditional segments like handicrafts, handlooms, carpets, jute and silk—spread across Uttar Pradesh, Rajasthan, West Bengal, Bihar and Karnataka—are also likely to see gains.

Industry leaders believe the agreement could drive fresh investments, encourage capacity expansion and support job creation, particularly for women workers and artisans. Lessons from countries such as Vietnam, whose EU textile exports surged after its FTA, further strengthen optimism.

Beyond tariffs, the India-EU FTA also aims to ease non-tariff barriers through improved customs procedures and regulatory cooperation, reducing delays and compliance costs for exporters. As global buyers seek to diversify supply chains, India’s textile and apparel sector appears well-positioned to emerge as one of the clearest and most immediate winners of the landmark trade deal.