Maharashtra, Karnataka To UP, Tamil Nadu: India-EU FTA Will Help All States

Last Updated:January 27, 2026, 20:28 IST

By eliminating 9,425 tariff lines and improving market access, India-EU FTA will expand opportunities for sectors such as textiles, apparel, leather, gems and jewellery, etc

PM Narendra Modi with European Council President Antonio Costa (left) and European Commission President Ursula von der Leyen in New Delhi on Tuesday. (PTI)

Prime Minister Narendra Modi on Tuesday said that the India-European Union Free Trade Agreement finalised on Tuesday will provide the country’s labour-intensive products easy access to the European Union market.

The India-EU FTA is projected to deliver a Rs 6.4-lakh-crore boost to Indian exports to the European Union, while opening EU markets to Indian MSMEs, manufacturers, farmers, students, and professionals.

By eliminating 9,425 tariff lines and improving market access, the agreement will expand opportunities for labour-intensive sectors such as textiles, apparel, leather, gems and jewellery, handicrafts, agriculture exports in tea, spices, marine products and high-tech manufacturing exports of engineering goods, electronics, pharmaceuticals and medical devices.

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The gains will be broad-based and cluster-led, benefiting manufacturing and services hubs across multiple states especially those anchored in MSMEs and labour-intensive value chains. Export-oriented ecosystems such as textile and apparel belts, leather clusters, marine export hubs, pharma and electronics corridors stand to see direct demand expansion and stronger integration into EU supply chains.

How States Will Benefit

MAHARASHTRA

Maharashtra will see strong demand from E.U markets translate into stronger orders across both scale manufacturing and MSMEs. With textiles moving from 12% to 0% and electronics from 14% to 0% on 99.6% of exports, clusters such as garments manufacturing clusters in Ichalkaranji and engineering goods as well as electronics and pharmaceutical sector in Pune can expand orders and deepen EU supply chain linkages.

Pharmaceuticals exports from Thane-Raigad, and gems and jewellery exports from Mumbai are positioned to grow as tariffs come down and market access improves. This mix creates a jobs boost across labour-intensive production as well as high value manufacturing.

GUJARAT

Gujarat gains through its export-led industrial belt where large anchors and MSME vendors operate in the same supply chains. Surat is set to expand textiles and diamonds and jewellery, while Bharuch-Vadodara can scale chemicals with tariffs falling from 12.8% to 0% on 97.5% of chemicals exports to EU. Rajkot is likely to benefit through surge in export of engineering goods and electronics, and Veraval through higher marine exports that support coastal livelihoods and processing units.

TAMIL NADU

Tamil Nadu stands out for immediate upside in labour-intensive clusters that are already globally competitive. Apparel from Tiruppur becomes significantly more competitive with textiles tariffs moving from 12% to 0%, while Vellore-Ambur leather and footwear exporters gain from a major cut in tariffs from 17% to 0% now to EU. At the same time, manufacturing corridors of engineering goods and electronics in Chennai and Coimbatore can deepen exports strengthening the full value chain from MSME suppliers to large manufacturers.

WEST BENGAL

West Bengal is set to see benefits that connect directly to livelihoods in tea, coastal production, and crafts. North Bengal can strengthen exports of Darjeeling tea, building on preferential access to European markets. Seafood exports from Digha and Haldia such as shrimp and frozen fish which currently attract as high as 26% tariff will see preferential access to E.U markets. Traditional handicrafts will gain from improved access, supporting small producers and local value addition.

ASSAM

Assam sees a direct pathway for farmers and artisans into premium EU markets, with strong potential for brand-led exports. Dibrugarh–Jorhat tea exports can expand, while Upper Assam spices gain from improved access and better price realization. Barpeta and Nalbari are positioned to scale bamboo-based furniture and handicrafts, and niche pharmaceutical exports also get a lift through more predictable market entry.

KERALA

Kerala stands to benefit through high-demand food and spice categories that are closely tied to farmer and fisher incomes. Kochi and Alappuzha can expand shrimp and tuna exports through preferential access to EU markets supporting processing units and port-linked logistics. Idukki and Wayanad gain through spices like pepper and cardamom which will benefit from increased access to wider EU market.

KARNATAKA

Karnataka is well-placed to convert preferential access into growth across advanced manufacturing and export services linkages. Export momentum is expected from Bengaluru-Tumakuru in engineering goods, electronics and pharmaceuticals, supported by a strong ecosystem of component and ancillary MSMEs.

Bengaluru’s apparel exporters also stand to gain, helping job creation in labour-intensive manufacturing alongside high skill sectors.

ANDHRA PRADESH

Andhra Pradesh benefits strongly through its coastal export economy where EU demand can lift both volumes and value addition. Visakhapatnam and Kakinada are expected to see a substantial rise in shrimp and seafood exports, supporting fisheries, processing and cold-chain jobs. Visakhapatnam also gains in pharmaceuticals and electronics exports, strengthening the state’s manufacturing base.

TELANGANA

Telangana benefits through a balanced profile of textiles and advanced manufacturing sectors. Hyderabad-Warangal can expand textile and apparel exports, supporting MSMEs and factory employment in labour-intensive units. Hyderabad is also positioned to grow exports of pharmaceuticals, electronics, medical devices and engineering goods, reinforcing the state’s role in high-value global supply chains.

PUNJAB

Punjab gains through clusters where MSMEs dominate and employment intensity is high. Ludhiana can expand garments and knitwear exports, while Jalandhar is poised to push sports goods deeper into EU markets. Mandi Gobindgarh’s light engineering units also stand to benefit, strengthening industrial jobs and ancillary supply chains.

RAJASTHAN

Rajasthan gains through labour-intensive craft and manufacturing clusters that are export-ready but often constrained by market access. Jaipur jewellery exports are expected to rise, while Jodhpur can expand wooden furniture and handicrafts with stronger EU reach. Churu sports goods, textiles such as Bandhej, and leather goods also stand to gain, spreading benefits across MSMEs and artisan communities.

UTTAR PRADESH

Uttar Pradesh is among the biggest potential job multipliers because of its large labour-intensive base in leather and crafts. Leather footwear exporters in Kanpur and Agra can scale up shipments, while Saharanpur benefits through furniture and handicrafts exports. Noida’s electronics manufacturing and Western UP’s agri-products also gain, widening the state’s export basket.

Taken together, the India-EU FTA is a state-by-state opportunity to scale India’s most competitive export clusters. It creates a clear runway for labour-intensive manufacturing such as textiles, apparel, leather, gems and jewellery, sports goods and handicrafts, while also expanding demand for agriculture-linked exports such as tea, spices and marine products.

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