Described as the ‘mother of all deals’, the India–European Union (EU) Free Trade Agreement (FTA), concluded recently, holds immense potential in terms of scale. Admittedly, the EU constituents are high-income countries with purchasing power.

Bilateral merchandise trade between India and the EU stood at about US $135 billion in fiscal 2024-25, with India’s exports valued at $75 billion. India has been enjoying a goods trade surplus of $14-16 billion in recent years. The FTA is expected to provide a further boost to the bilateral trade relationship.

From India, key labour-intensive goods exported to the EU include textiles, readymade garments, gems and jewellery, leather goods, handicrafts, and some agricultural commodities, including marine products. Tariff elimination is sure to improve India’s price competitiveness vis-à-vis other countries (Bangladesh, Vietnam, Turkey, etc.) that export similar goods to the EU.

That makes not price but quality and sustainable production practices the key to unlock the........

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