India-EU FTA targets 2027 rollout: Textile, leather, seafood exporters in focus; key stocks to watch

Indian export-oriented sectors such as textiles, gems & jewellery, leather and footwear, and marine products, among others, are expected to be in focus as latest news reports suggest that India's free trade agreement (FTA) with the European Union (EU) may come into effect in the first quarter of 2027 after being signed by the end of 2026.

Speaking at the Berlin Global Dialogue in Germany, Goyal added that the agreement would “probably” be operationalised in the first quarter of 2027.

What you need to know

The proposed trade pact could improve Indian exporters’ access to the European market by reducing or removing tariffs on eligible goods, potentially benefiting sectors such as textiles, apparel, leather, gems and jewellery, pharmaceuticals, chemicals and marine products.

However, the potential benefits will depend on the final terms of the agreement, product-specific tariff concessions and individual companies’ exposure to the EU market.

Investors will also track whether improved market access translates into stronger export orders, revenue growth and margins.

Stocks and sectors in focus

Textiles and apparel

Indian textile and apparel exporters could gain from the removal of EU import duties, improving their price competitiveness against suppliers from competing countries. Watch for fresh export orders and margin improvement.

Leather and footwear

The sector is among the direct beneficiaries of the proposed duty concessions. Lower import duties in Europe could make Indian leather products and footwear more competitive, potentially supporting export growth. The benefit will vary with each company's EU exposure.

Gems and jewellery

Preferential access to European markets could support jewellery exporters by reducing tariff-related costs. Export-oriented manufacturers stand to gain more directly than companies primarily dependent on India's domestic jewellery market.

Marine products and seafood

Selected marine products are expected to receive improved tariff access, which could help Indian seafood exporters compete in Europe. The impact will depend on product-specific concessions, export exposure and compliance with EU food-safety standards.

Chemicals and specialty chemicals

Lower EU tariffs on covered chemical products could improve export competitiveness. Companies with established European customers and products eligible for concessions are better positioned to benefit.

Pharmaceuticals

Indian drugmakers could benefit from improved trade conditions and opportunities to expand in Europe. However, regulatory approvals, product-specific provisions and competition will remain important determinants of the gains.

Capital goods and engineering

Engineering goods manufacturers and technology service providers could benefit from improved market access, stronger trade ties and deeper integration into European supply chains. Actual benefits will depend on contract wins and the companies' existing exposure to the region.

Steel and metals

Preferential market access and tariff concessions for eligible metal products could support exports. However, the EU's carbon-border measures remain a potential headwind, so the net benefit needs to be assessed carefully.

Sectors that could face competition

According to available reports and analyssi, automobile firms such as Maruti Suzuki India, Tata Motors and Mahindra & Mahindra may be watched as the pact changes access to the two markets.

India's concessions on European vehicles are calibrated and subject to quotas, so the impact will not be uniform.

India–EU Free Trade Agreement (FTA)

The India–EU Free Trade Agreement (FTA) is a trade pact between India and the European Union designed to reduce import duties, improve market access, and make it easier for businesses in both markets to trade goods and services.

In a press release issued by PIB on January 27, 2026, the government said that "with a combined market estimated at over ₹2091.6 lakh crore ($24 trillion), bringing unparalleled opportunities for the 2 billion people of India and the EU, the FTA unlocks significant potential for trade and innovation. The FTA delivers unprecedented market access for more than 99% of India’s exports by trade value, while preserving policy space for sensitive sectors and reinforcing India’s developmental priorities."

Bilateral merchandise trade between India and the EU has demonstrated sustained growth, valued approximately at ₹11.5 lakh crore ($136.54 billion) in 2024-25, with India exporting roughly ₹6.4 lakh crore ($75.85 billion) to the EU.

Key point

The European Union (EU) consists of 27 member states. The United Kingdom (UK) is no longer a part of the European Union. The UK formally ended its 47-year membership and left the EU on January 31, 2020.

This historic departure, widely known as Brexit, was triggered by a public referendum held in June 2016 where a majority voted to leave the bloc.