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India-EU Trade Pact Lifts Industry Confidence, CITI Sees Strong Export Upside

• By  Textile Excellence
• January 30, 2026

The India-European Union Free Trade Agreement has delivered a major confidence boost to the textile and apparel sector, according to Ashwin Chandran, Chairman of the Confederation of Indian Textile Industry. He described the deal as a decisive moment that could reshape India’s export trajectory at a time when the industry faces pressure from high US tariffs and slowing global demand.

India’s textile and apparel exports stood close to US$38 billion in FY25, while shipments to the European Union make the bloc the second largest market after the United States. Mr Chandran said duty free access to the 27 nation EU market will help Indian exporters close the long-standing tariff gap faced against competitors such as Vietnam and Bangladesh. Removal of this cost disadvantage is expected to improve pricing competitiveness and order conversion rates.

CITI believes the agreement strengthens India’s ability to move towards its long-term export ambition of US$100 billion by 2030. Mr Chandran pointed out that the EU deal creates new business opportunities at a critical juncture, as the United States continues to impose a 50% tariff on Indian goods, affecting nearly 28% of the sector’s export revenues.

He cautioned that market access alone will not guarantee success. Indian exporters must intensify efforts in innovation, sustainability and value addition to fully leverage the opportunity. Stronger compliance, differentiated products and higher value manufacturing will determine long term gains. CITI views the trade pact as a gateway to reposition India higher in global value chains, provided the industry responds with speed, discipline and strategic investment.

CITI believes the agreement strengthens India’s ability to move towards its long-term export ambition of US$100 billion by 2030. Mr Chandran pointed out that the EU deal creates new business opportunities at a critical juncture, as the United States continues to impose a 50% tariff on Indian goods, affecting nearly 28% of the sector’s export revenues.