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India-EU FTA: Key benefits for India and impact on competing countries

India’s products face several hurdles related to rules of origin and product profiles. The EU’s non-tariff barriers, especially on India’s labour-intensive sectors like textiles, have come under scrutiny in India’s discussions. India has advocated for textiles to be listed as non-tariff items due to the high tariffs imposed on the sector, alongside various non-tariff barriers it must overcome to access a large market like the EU. Currently, India’s textiles and apparel need to improve their product profile to benefit from the Free Trade Agreement (FTA). However, a scenario where tariffs are reduced to zero per cent would provide Indian exporters insight into which products, especially high-value-added items like apparel that currently face the highest tariff rates under the Developing Countries Trading Scheme (DCTS), would benefit if tariffs were lowered. The analysis is conducted using the SMART tool of WITS with the **** (latest) database available. Fibre2Fashion analyses how much apparel will gain if the India-EU FTA is signed and identifies the potential losing countries.

Exhibit *: India’s apparel exports in EU’s apparel imports in the UK (in $ Bn)