FTA expected to widen market access for textiles, automobiles, footwear, seafood and engineering goods from the state
Tamil Nadu is preparing to expand its exports to European markets as the proposed India-European Union Free Trade Agreement (FTA) is expected to come into force in early 2027, opening wider opportunities for manufacturers and exporters across the state.
Under the agreement, the EU has committed to immediately remove duties on about 70.4 per cent of tariff lines, covering nearly 90.7 per cent of India’s export value. A further 20.3 per cent of products are expected to receive phased tariff elimination. Overall, concessions will cover nearly 97 per cent of tariff lines and more than 99 per cent of trade value.
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Tamil Nadu, one of India’s major manufacturing and export hubs, could benefit in sectors including textiles and apparel, leather and footwear, automobiles, engineering goods, pharmaceuticals, seafood, rubber products, information technology and financial services
The state recorded merchandise exports of about $59.3 billion in 2025-26, with the EU accounting for roughly $11.3 billion, or around 19 per cent.
The Tirupur textile cluster is expected to be among the major beneficiaries. Industry representatives said the removal of tariffs, including a 10 per cent duty on textiles, could improve the competitiveness of Indian garments against suppliers from countries that already enjoy preferential access to European markets.
The Southern India Chamber of Commerce and Industry (SICCI) recently led a Tamil Nadu delegation to Germany and Italy to explore opportunities in automotive manufacturing, semiconductors, green mobility and skills development. A German certification and standards organisation has also expressed interest in setting up a centre in Chennai to assist small and medium enterprises with European compliance requirements.
Industry representatives, however, said exporters will need stronger compliance systems, international certifications, specialised skills and capabilities to meet environmental requirements such as the EU’s Carbon Border Adjustment Mechanism.
SICCI has proposed an India-EU FTA Desk in Chennai to provide exporters and investors with market intelligence, regulatory information and investment support.
