India’s trade agreement with the EU has the potential to go beyond simply boosting imports. It could also strengthen the country’s manufacturing base. By reducing tariffs on nearly 97 per cent of EU exports, India gains easier access to high-value goods such as advanced machinery, specialised equipment, cutting-edge technology and critical industrial inputs.1
This is important-not just for trade, but for how it can reshape India’s domestic manufacturing ecosystem.
The bigger opportunity lies beyond just increasing imports. It’s about how these imports can be used to strengthen domestic capabilities, integrate more deeply into global value chains and drive long-term competitiveness for India’s manufacturing sector.
As more European firms deepen their presence in India, Indian businesses could also gain greater exposure to global production practices, technology standards and supply chain discipline. That matters because global trade today is increasingly driven by quality, reliability and integration into value chains, not only cost competitiveness.
The real opportunity ahead lies in turning imports into capability. If leveraged well, this deal can go beyond boosting exports and play a key role in building long-term strength in India’s manufacturing sector.
[1] India-European Union (EU) free trade agreement (FTA), KPMG in India, 30 March 2026, accessed on 26 May 2026
