The India-EU Free Trade Agreement, potentially signed January 27, is being hailed as the ‘Mother of All Deals,’ with projections of India’s trade surplus soaring past $50 billion by 2031. Talks, spanning ten years, have intensified amid geopolitical trade shifts.
An MK Global report highlights how this pact will empower India’s trade with the EU. EU’s share in Indian exports may rise from 17.3% (FY2025) to 22-23%, amplifying growth even as India’s EU market share lingers at 0.8%. Notably, EU’s position flipped from $3 billion surplus (FY2019) to $15 billion deficit (FY2025).
It dovetails with Europe’s China-plus-one strategy, favoring Indian labor sectors like apparel, footwear, electronics, machines, and chemicals. FY25 trade volume: $136 billion, India’s exports at $75.9 billion vs. EU’s $60.7 billion.
Exports such as mobiles, clothes, shoes, rubber products, pharma, vehicle parts, fuels, and jewels are substituting previous EU sources, tied to offshored European production. EU inflows of advanced machinery, aviation, components, chems, med devices, and scrap aid Indian operations, uplifting SMEs and factories alike.
The FTA forecasts tariff relief for Indian goods and preferential treatment for EU luxuries like cars and wine. Beyond numbers, it builds a resilient trade framework, spurring innovation and mutual economic strength in a volatile world.