Ahmedabad: Gujarat is expected to emerge as one of the major beneficiaries of the proposed India–European Union Free Trade Agreement (FTA), with significant export growth opportunities anticipated across multiple sectors.

The agreement is set to provide a major boost to Gujarat’s textiles and apparel, chemicals, engineering goods, pharmaceuticals, gems and jewellery, and marine products industries. With duty reductions and easier access to 27 European Union markets, exporters from major industrial hubs such as Ahmedabad, Surat, Vadodara, Bharuch, Rajkot and Jamnagar are expected to gain enhanced global competitiveness.

Sector-wise Impact on Gujarat

Textiles and Apparel

Gujarat is a national hub for textiles, with major centres in Surat, Ahmedabad and Bharuch.

Under the FTA, EU tariffs of up to 12% on textiles and garments will be reduced to zero duty. The coverage includes cotton yarn and fabrics, man-made fibre textiles, ready-made garments and home textiles.

The agreement opens access to the EU’s ₹22.9 lakh crore textile import market.

Key benefits include:

• Higher exports from Surat’s textile clusters

• Expansion of MSMEs

• Large-scale employment generation

• Improved competitiveness against Bangladesh and Vietnam

Chemicals and Petrochemicals

Gujarat accounts for over 50% of India’s chemical production, with major clusters located in Ankleshwar, Vapi, Dahej, Vadodara and Bharuch.

The FTA ensures zero duty on 97.5% of chemical exports by value, including the removal of tariffs of up to 12.8%.

Benefiting segments include organic and inorganic chemicals, agrochemicals and specialty chemicals, providing access to the EU’s ₹43.5 lakh crore chemical import market.

Expected outcomes:

• Significant export expansion

• Strengthening of MSME clusters

• Boost to sustainable and high-value chemical manufacturing

Engineering Goods

Gujarat is a major exporter of industrial machinery, electrical equipment, auto components, and metal and fabricated products.

Earlier, EU tariffs on these products reached up to 22%. Preferential access under the FTA is expected to enhance India’s ₹1.44 lakh crore engineering exports to the EU and improve Gujarat’s share in the EU’s ₹174 lakh crore engineering import market.

Benefits include:

• Industrial modernisation

• Technology partnerships

• Stronger MSME participation

• Growth in export-oriented manufacturing

Gems and Jewellery

Surat is the global centre for diamond cutting and polishing.

Earlier EU tariffs of up to 4% have now been reduced to zero duty, covering 100% of trade value. The sector currently exports jewellery worth ₹23,500 crore to the EU.

Expected gains include:

• Increased export competitiveness

• Higher demand for Gujarat-processed diamonds

• Large-scale employment generation

• Expansion in value-added jewellery manufacturing

Marine Products and Blue Economy

Coastal districts such as Veraval, Porbandar and Okha are expected to benefit significantly.

EU tariffs on marine products, which earlier went up to 26%, will be eliminated, providing preferential access covering 100% of trade value.

Key products include shrimp and prawns, frozen fish and value-added seafood. The EU marine import market is valued at ₹4.67 lakh crore.

Benefits include:

• Higher export earnings

• Growth of seafood processing units

• Direct support to fishing communities

• Strengthening of Gujarat’s blue economy

Pharmaceuticals and Medical Devices

Gujarat hosts major pharmaceutical manufacturing clusters in Ahmedabad and Vadodara.

Tariffs of up to 6.7% will be eliminated across 99.1% of trade lines, covering medical instruments, diagnostic devices, and measuring and testing equipment.

Key advantages include:

• Cost-competitive access to EU healthcare markets

• Increased formulation exports

• Boost to medical technology manufacturing

Plastics and Rubber

Gujarat remains India’s primary polymer and plastics manufacturing hub.

The EU import market in this sector is valued at ₹27.6 lakh crore, while India’s exports currently stand at ₹20,900 crore.

The FTA enables preferential tariff access and expansion in moulded products, packaging materials and industrial plastics.

Expected impact:

• MSME scale-up

• Increased exports

• Stronger integration with EU supply chains