India-EU FTA Nears Signature as Apparel Trade Hits $4.66bn Record

India's apparel exports to the European Union reached a record US$4.66 billion in FY26, up from US$4.55 billion in FY25, as officials from both sides met in Brussels to prepare implementation of a trade agreement that would eliminate tariffs on more than 99% of Indian exports to the bloc.

Commerce Secretary Rajesh Agrawal held talks with senior European Commission officials, including Ditte Juul Jorgensen, Director-General of the Directorate-General for Trade and Economic Security (DG TRADE). The agenda covered market access, trade facilitation and supply chain resilience, according to an official statement from the Union Ministry of Commerce and Industry.

The two sides reaffirmed their commitment, in the ministry's words, to "a fair, balanced and mutually beneficial agreement" and agreed to address the remaining procedural and implementation-related issues. That phrasing is doing some work. Agreements to address issues are not, strictly speaking, issues addressed.

What does the meeting actually settle?

The Brussels sessions concentrated on customs cooperation and trade facilitation. Both sides emphasised efficient, transparent and digitally enabled customs procedures — measures intended to reduce transaction costs and keep goods moving. For sourcing teams, customs digitisation is the quiet half of any FTA. Tariff schedules draw the headlines; clearance times determine whether the duty saving survives contact with the port.

The confirmed facts are these:

• India and the EU concluded FTA negotiations at the 16th India-EU Summit on January 27, 2026, in the presence of Prime Minister Narendra Modi and European Commission President Ursula von der Leyen.
• The agreement is undergoing legal verification ahead of a proposed signing in mid-December 2026.
• Full ratification and entry into force are targeted for mid-2027.
• Tariffs are expected to be eliminated on over 99% of Indian exports to the EU.

Note the tense. The signing is proposed, the ratification is targeted, the elimination is expected. Confirmed deal today; benefits on a timetable.

Where textiles sit in the equation

The ministry identifies labour-intensive sectors — textiles, apparel, leather and jewellery — as principal beneficiaries, on the argument that tariff removal improves competitiveness and access to the European market. The claim is plausible; the EU's import base is large enough to absorb it. The bloc imported US$263.5 billion of textiles and apparel in 2024, and it remains India's second key export market after the United States.

India's export mix to the EU is already weighted toward finished goods rather than upstream fibre. Ready-made garments account for 60% of India's textile and apparel exports to the EU. Cotton textiles hold 17% and man-made fibre textiles 12%. That composition matters for buyers: tariff relief on garments lands directly on landed cost for brands sourcing finished product, rather than being diluted across intermediate stages.

For European buyers weighing Bangladesh, Turkey or Vietnam against Indian suppliers, a 99%-plus tariff elimination line changes the arithmetic — though only after mid-2027, and only to the extent customs procedures deliver the promised friction reduction.

What does this change for sourcing decisions now?

Little, immediately. The agreement exists on paper and in legal verification; signature is slated for mid-December 2026, entry into force for mid-2027. The practical work between now and then is procedural: ratification across EU member states, customs system readiness, rules-of-origin administration. The Brussels meeting signals that both sides are at least sequencing that work rather than leaving it to the signing ceremony.

The record US$4.66 billion apparel figure shows the baseline is already rising before any tariff relief arrives. Roughly US$4.55 billion became US$4.66 billion in one financial year — growth of about 2.4%, achieved under current duties. What the FTA adds is the margin question: how much of the tariff saving reaches Indian factory prices versus staying with the buyer.

The ministry expects the agreement to further improve market access and support export growth. Expectation, again. The signing date in December will convert some of it into fact.