Lok Sabha Question No. 3965 (UNSTARRED), answered on 2026-03-17
Subject: Review of Newly Conducted EU FTA
Ministry: COMMERCE AND INDUSTRY
Asked by: Dr. Amar Singh

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE AND INDUSTRY DEPARTMENT OF COMMERCE

## LOK SABHA UNSTARRED QUESTION NO. 3965 ANSWERED ON 17/03/2026

## REVIEW OF NEWLY CONDUCTED EU FTA

## 3965.  DR. AMAR SINGH:

Will the Minister of COMMERCE AND INDUSTRY ( वाणिज्य एवं उद्योग मंत्री ) be pleased to state:

- (a) whether the Government has reviewed the legal and regulatory framework of the newly concluded  India-European  Union  (EU),  Free  Trade  Agreement  (FTA)  and  identified specific product and service categories in which Indian exporters are expected to receive immediate or phased tariff advantages including those in Punjab;
- (b) if so, the details of the Government analysis on targeted support measures such  as quality certification, logistics facilitation and export credit to maximise the benefits of market access under the FTA; and
- (c) the steps proposed by the Government to coordinate with the Ministry of   Commerce and  Industry  and  State  Governments  to  help  sectors  such  as  textiles,  apparel,  agriprocessing and engineering goods exploit new export opportunities?

## ANSWER

## वाणिज्य एवं उद्योग मंत्रालय में राज्यमंत्री ( श्री णिणिन प्रसाद ) THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY (SHRI JITIN PRASADA)

(a)  India and the European Union (EU) announced the conclusion of negotiations for a Free Trade Agreement (FTA) on 27th January 2026 at the 16th India-EU Summit held in New Delhi. Under the Agreement, India has secured preferential market access across 97% of EU tariff lines, covering 99.5% of India's exports by trade value. Of this, 70.4% of tariff lines, accounting for 90.7% of India's exports, will enter the EU market at zero duty from the date of entry into force of the FTA, particularly benefiting key labour-intensive sectors such as textiles and apparel, marine products, leather and footwear, chemicals, plastics and rubber, sports goods, toys, and gems and jewellery.  A  further  20.3%  of  tariff  lines,  covering  2.9%  of  India's  exports,  will  witness  duty elimination over a period of 3-5 years, while 6.1% of tariff lines, covering 6% of exports, will receive preferential access through tariff reductions or Tariff Rate Quotas (TRQs). The Agreement is expected to benefit exporters from Punjab in sectors such as textiles & apparel, sports goods, engineering goods and agri products.

(b) To maximise the benefits of market access under the FTA and to bolster the export readiness of Indian exporters, the Government has launched the Export Promotion Mission (EPM), which is designed to provide coordinated support across key elements of the export ecosystem, including trade finance, standards compliance, logistics, overseas warehousing and market development. The  Mission  is  implemented  through  two  integrated  sub-schemes:  Niryat  Protsahan,  which focuses on financial enablers and trade-finance support, and Niryat Disha, which addresses nonfinancial,  market-access  and  ecosystem  enablers.  With  these  integrated  interventions,  the Mission provides coordinated support through interest subvention, collateral-free export credit, alternative  trade-finance  instruments,  e-commerce  exports,  compliance  enablement,  logistics cost mitigation, trade intelligence and overseas fulfilment.

In order to support Indian exporters, particularly MSMEs, which are predominantly concentrated in labor-intensive sectors such as textiles, apparel, agri processing, leather goods, handicrafts and engineering goods, and enable them to explore new export opportunities by facilitating the availability  of  affordable  and  adequate export credit and improved market access, ECGC has taken following initiatives:

- i. To  encourage  market  diversification,  ECGC  upgraded  the  country  risk  ratings  for  24 nations across Latin America, Africa and East Asia in September, 2025, to help Indian exporters  to  diversify  their  markets  by  reducing  insurance  costs  for  exports  to  these geographies.
- ii. ECGC has also extended RBI's trade relief measures (announced in November, 2025) under  its  Short-term  (ST)-Policy  and  ST-ECIB  (Export  Credit  Insurance  for  Banks) schemes.  This will ease the hardship faced by the exporters due to the ongoing adverse market condition ensuring business continuity, and providing greater flexibility in export operations,  by  deferring  loan  repayments  and  offering  longer  tenure  for  receivables realization.
- iii. ECGC  widened  the  scope  of  its  enhanced  cover  of  90%  for  banks  under  its  Whole Turnover-Export Credit Insurance for Banks (WT-ECIB) for export credit working capital limits up to ₹80 crore with effect from (w.e.f.) July 1, 2024, with no incremental cost up to ₹50 crore w.e.f. October 1, 2025, significantly reducing interest rates for small exporters, to encourage banks to continue lending despite global volatility.
- iv. Collateral-Free  Cover  of  90%  under  WT-ECIB to  Micro  and  Small  Enterprises  (MSE) exporters, for export credit working capital limits up to ₹10 crore, without any additional premium, was introduced w.e.f. July 1, 2025 to support liberal and collateral-free export credit lending by banks in respect of exporter-borrowers who are not in a position to offer any collateral or third-party guarantee.
- v. Introduction  of  simplified  procedure  for  settlements  of  ECIB  Claims  with  net  principal outstanding up to ₹10 crore for the exporter/exporter group, with fewer documents required for claims processing in order to improve the turnaround time for settlement of claims.
- vi. ECGC has also introduced Export Factoring Facility in Foreign Currency (EFF-FC) from its IFSC Insurance Office (IIO), GIFT City in December, 2025 to boost exports by providing Indian  exporters,  especially  MSMEs,  immediate  cash  realization  against  their  export receivables ensuring liquidity and credit risk protection.
- vii. To facilitate ease of doing business, ECGC expanded its online services for its customers in January 2026, wherein all ST Policy Covers (except Customer Specific Covers) can be availed  through  online  Client  portal  ensuring  quicker  service  delivery.  A  Common Facilitation Centre has also been established to assist with insurance-related queries.

(c) The Ministry of Commerce and Industry has been coordinating with State Governments and Union Territories to enable Indian exporters to take advantage of the opportunities arising from the India-EU FTA, particularly in sectors such as textiles, apparel, marine products, leather and footwear, chemicals, plastics and rubber, sports goods, toys, gems and jewellery, and agricultural products including tea, coffee, and spices.

The transition period prior to the Agreement's entry into force is being utilised to create awareness among  farmers,  MSMEs,  industries,  and  exporters  by  holding  workshops  and  stakeholder sensitisation  programmes  to  prepare  them  for  fully  leveraging  the  new  market  access opportunities under the Agreement.

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