A landmark free trade agreement between India and the European Union could be inked on January 27, heralding unprecedented trade opportunities. Experts predict India’s trade surplus with the 27-nation bloc will exceed $50 billion by 2031, fueled by this ‘Mother of All Deals’ that has been in the works for a decade.
Accelerated talks reflect responses to worldwide trade volatility. According to MK Global’s Sunday report, the FTA will dramatically strengthen India’s foothold in European markets. EU’s slice of India’s exports is set to jump from 17.3% in FY2025 to around 22-23%, supercharging overall export growth despite India’s current 0.8% share in EU imports.
Trade balances have swung sharply: from a EU surplus of $3 billion in FY2019 to a $15 billion deficit in FY2025. This shift aids Europe’s de-risking from China, benefiting Indian industries in textiles, footwear, electronics, machinery, and chemicals with vast new markets.
FY25 saw $136 billion in two-way trade—India’s $75.9 billion exports outpacing $60.7 billion imports. Standouts include smartphones, garments, footwear, tires, drugs, auto components, refined fuels, and gems, replacing prior EU imports from other nations where European companies had offshored production.
EU supplies premium machinery, planes, key electronics, chemicals, high-tech medical gear, and scrap metal, empowering Indian manufacturing, recycling, and MSMEs to boost efficiency and global edge. Anticipated outcomes include slashed duties on Indian labor-heavy goods and smoother entry for EU luxury autos and spirits into India.
This pact not only amplifies trade volumes but redefines Indo-European economic partnerships, fostering resilience in uncertain times.
