Mumbai’s latest economic analysis reveals a game-changer for Indian exporters. The proposed Free Trade Agreement (FTA) with the European Union could open doors to an additional $10-11 billion in exports, according to a fresh report from Rubix Data Sciences.
This surge doesn’t require new production capacities. Instead, India can redirect exports currently hit by US tariffs. Top 15 product categories to the US, worth about $45 billion and comprising 52% of total US-bound shipments, hold the key. Twelve of these categories, valued at $21 billion, have limited presence in the EU market.
Redirecting even 50% of these through tariff reductions and better market access could reshape India-EU trade dynamics dramatically. Over the past three fiscal years (FY23 to FY25), bilateral trade has stagnated at $136.5 billion. Yet, in FY25, the EU overtook the US as India’s largest trading partner.
India’s share in EU imports stands at a modest 2.9%, and in exports at 1.9%, highlighting a gap between ambition and reality. Moreover, 70% of India’s EU exports concentrate in just five member states, underscoring the need for diversification.
The EU, with its $21.1 trillion economy growing at a sluggish 1.4%, faces slowdowns in powerhouses like Germany, France, and Italy. Beyond trade, the bloc remains a major investor, pumping $119.2 billion into India since April 2000—16.5% of total FDI inflows.
This FTA could be the catalyst to invigorate stalled trade flows, bolster investor confidence, and position India as a stronger EU partner amid global uncertainties.