Indian companies, particularly micro, small and medium enterprises (MSMEs), need a strategic approach to fully benefit from the India-European Union (EU) Free Trade Agreement (FTA), according to industry chamber FICCI. The organisation highlighted that tariff concessions alone will not guarantee higher exports without stronger market strategies and compliance with European standards.

FICCI Secretary General Anant Swarup said Indian businesses must identify products with significant tariff advantages, strengthen relationships with European buyers, improve product quality and integrate into European supply chains.

The agreement offers opportunities for Indian businesses across sectors such as textiles, leather, engineering components, chemicals and processed foods. MSMEs can also expand by supplying larger Indian and European companies.

However, meeting EU requirements related to product safety, technical standards, sustainability, traceability and carbon emissions remains a major challenge. Evolving regulations, including the Carbon Border Adjustment Mechanism (CBAM), may require businesses to invest in cleaner technologies, certification and digital traceability systems.

FICCI emphasised the need for dedicated FTA helpdesks, sector-specific guidance, internationally accredited testing laboratories and affordable financing to help smaller businesses meet export requirements. Technology upgrades and stronger cooperation between Indian and European certification bodies could also reduce compliance costs and delays.

Beyond tariff reductions, the FTA could encourage European investment in India, promote technology partnerships and strengthen the country's position in global value chains.

India and the EU announced the conclusion of FTA negotiations on January 27, 2026. The agreement is expected to be signed in December 2026 and could come into force in 2027.

India's exports to EU countries declined by 4.57% to USD 72.4 billion in FY2025–26, while imports increased by 9% to USD 66.18 billion. The EU accounted for approximately 17% of India's merchandise exports during the financial year, highlighting its importance as a key trading partner.