The newly finalised India European Union Free Trade Agreement is one of the most significant trade developments in recent global economic history. This pact links two large economic regions covering roughly 25 percent of global GDP and nearly 2 billion people, opening expanded market access for Indian exporters and creating opportunities for deeper integration into global value chains. (The Economic Times)
This article explores the implications of this agreement for Indian businesses, particularly exporters and MSMEs, and explains how TASConnect’s finance and supply chain capabilities can help organisations optimise working capital and scale sustainably in the era of cross border trade.
What the India EU FTA Means for Business Growth
The India EU Free Trade Agreement significantly reduces or removes tariffs on the majority of goods traded between the two markets, including key Indian exports such as textiles, apparel, leather, gems and jewellery, and marine products.
By opening the EU market with preferential or zero duty access, Indian exporters are positioned to compete more effectively against global peers. For example, the gem and jewellery industry alone is expected to double its bilateral trade within three years as a result of tariff removal and improved competitiveness. (The Economic Times: India-EU FTA expected to double jewellery trade to $10 billion in three years: GJEPC)
Services sectors, including professional services, technology and digital trade, also gain more predictable access to European demand through expanded market entry provisions. (The Economic Times: India-EU FTA: A strategic leap strengthening India’s global economic clout)
Sectoral Opportunities and Export Potential
Textiles and Apparel
With zero duties on many product categories, India’s textile and apparel exports are poised for significant growth in Europe’s large consumer market. This can restore competitiveness that was previously constrained by tariff disadvantages.
Gems and Jewellery
Industry projections indicate that jewellery exports to the EU could grow from roughly $5 billion to up to $10 billion over a short period, driven by eliminated duties and stronger market access.
Chemicals, Machinery and Other Goods
Duty elimination also extends to chemicals, plastics, metals and capital goods, reducing costs and enhancing the price competitiveness of Indian manufacturers in Europe. (Tradeimex: Historic India-EU Trade Deal Announced: Implications of This Landmark FTA on Global Trade)
Services and Digital Trade
Market access improvements for services expand export potential for Indian firms in technology, consulting, logistics and financial services as demand intensifies in European markets
Challenges That Remain
Despite the opportunities, realising export growth requires operational readiness, supply chain resilience, and access to working capital. Exporters, particularly smaller firms and MSMEs, often face challenges such as:
- Limited export financing options tailored to cross border trade.
- Cash flow pressures due to long payment terms and inconsistent receivables.
- Compliance and sustainability requirements that add cost and complexity.
Successfully navigating these issues is crucial to converting FTA access into sustainable export performance and economic benefit.
Why Trade Linked Finance Matters
Traditional credit models based on historical balance sheets do not always work well for export oriented firms. Instead, financing that reflects ongoing trade activity — including receivables, purchase orders, and shipment data — can better align capital with business performance.
Supply chain finance technology platforms like TASConnect offer solutions that help businesses unlock working capital based on the actual dynamics of cross border trade:
- Automated financing workflows: Streamlined processes reduce latency between transaction and funding, converting export receipts into usable cash faster.
- Real time visibility: Financial insights across payables and receivables help CFOs and finance teams understand the manage working capital
- AI driven recommendations: Based on the CFO’s objectives, identify opportunities for optimising payables and receivables, and take action
These capabilities help businesses overcome liquidity bottlenecks and scale export operations effectively as they expand into markets such as the EU.
Linking Global Trade to Sustainable Growth
Beyond financing, the FTA emphasises regulatory cooperation, digital trade frameworks, and intellectual property protections, making trade more predictable and enabling long term export strategies. (India Briefing: India-EU FTA Concluded: ‘Mother of All Deals’ Set to Reshape Global Trade)
However, meeting compliance standards — especially around quality, traceability and sustainability — is essential for exporters to achieve and maintain market access. A combination of operational discipline and access to data driven financing gives exporters a competitive edge in international markets.
Conclusion
The India EU Free Trade Agreement creates a structural shift in global commerce that benefits Indian exporters across goods and services. By removing tariff barriers and creating a stable environment for trade, the agreement presents a compelling opportunity for businesses to grow exports, build supply chain resilience, and increase global market share.
At the same time, success in international trade depends on execution. Access to trade linked capital, visibility into finance flows, and technology enabled operational efficiency are essential foundations for growth. TASConnect empowers businesses to harness these capabilities, enabling them to convert strategic trade opportunities into measurable performance outcomes.