India–EU Free Trade Agreement: Implications for Indian Textile and Pharma Exporters

The India–European Union Free Trade Agreement (FTA) concluded negotiations on 27 January 2026 andis now moving through the legal and approval process required before entry into force. For Indianexporters, the agreement is particularly important in textiles and pharmaceuticals, two sectors wheretariffs, regulatory requirements and scale strongly influence competitiveness. The European Commissionsays the EU will eliminate or reduce tariffs on more than 96% of its goods exports to India, while Indiasecured broad preferential access for its exports. India’s Commerce Ministry states that textiles andclothing receive zero-duty access across tariff lines, while the European Commission listspharmaceuticals among the sectors receiving substantial tariff liberalisation.This paper examines the likely transmission mechanism from tariff reduction to export competitiveness. Itargues that the FTA removes an important price disadvantage but does not automatically create exportgrowth. Textile exporters must still satisfy rules of origin, product standards and increasingly demandingenvironmental requirements. Pharmaceutical exporters face a different constraint: tariffs fall, but marketaccess remains dependent on quality systems, marketing authorisation, intellectual-property rules andregulatory compliance. The agreement therefore changes the competitive environment more than itguarantees an export boom.