Here's How Different States Will Benefit from the India-EU Free Trade Agreement

The India-European Free Trade Agreement is all set to deliver a 6.4 lakh crore boost to Indian exports by opening up the European markets for Indian MSMEs, manufacturers, farmers, students, and professionals.

By removing tariffs and granting market access, the FTA will prove to be directly beneficial for labour-intensive sectors such as textiles, apparel, leather, gems & jewellery, handicrafts, agriculture exports in tea, spices, marine products and high tech manufacturing exports of engineering goods, electronics, pharmaceuticals and medical devices.

Here is a state wise breakdown of what the FTA means for the nation’s most competitive export players:

Maharashtra

With tariffs on textile moving from 12% to 0% and electronics from 14% to 0% on 99.6% of exports, the state of Maharashtra is likely to receive a boost in these sectors.

Apart from this, the electronics and pharmaceutical sector in Pune and Thane-Raigad, as well as gem and jewellery exports from Mumbai will see a jump due to lower tariffs and better market access. This, in turn, will also lead to job creation in labour-intensive production and high-value manufacturing sectors.

Gujarat

The state of Gujarat will reap the benefits from its sprawling export-led industrial belt. This includes the textile, diamond, and jewellery industry in Surat, the engineering goods and electronics industry in Rajkot, and marine exports and processing unit clusters in Veraval, which will also directly support coastal livelihoods.

With tariffs falling from 12.8% to 0% on 97.5% of chemicals exports to E.U, the industry based in Vadodara can also plan scaling of chemicals.

Tamil Nadu

In Tamil Nadu, the textile industry in Tiruppur is positioned to receive a major impetus with tariffs lowering to 0% from 12%, while the same can be expected for Vellore-Ambur leather exporters with the tariffs going down from 17% to 0%.

The engineering goods and electronics industry in Chennai and Coimbatore will also be strengthened with expanding the full value chain from MSME suppliers to large manufacturers.

Telangana

The state of Telangana is expected to witness a balanced expansion in textiles and advanced manufacturing sectors. The Hyderabad-Warangal corridor is set to drive mass employment through expanded textile exports, while Hyderabad may scale up in high-tech sectors like pharma and electronics.

Karnataka

In the state of Karnataka, export momentum is expected from Bengaluru–Tumakuru in engineering goods, electronics and pharmaceuticals, supported by a strong ecosystem of component and ancillary MSMEs.

The textile sector based in Bangalore is also positioned to witness major growth.

Andhra Pradesh

The coastal export economy in the state of Andhra Pradesh will see a massive jump in both volume and value addition. A rise in shrimp and seafood exports from Vishakhapatnam and Kakinada can benefit the local fisheries, processing and cold-chain jobs, the pharmaceutical sector and electronic exports from Vishakhapatnam will also reap the benefits of the trade agreement.

West Bengal

The tea, coastal production, and crafts sectors in the state of West Bengal is expected to witness a substantial growth. While the North Bengal can strengthen exports of Darjeeling tea in EU markets, the export of shrimps and frozen fish from Digha and Haldia will also enjoy a massive release with the tariff majorly lowering from the current 26%. The traditional handicrafts industry will also flourish with preferential access to EU markets.

Uttar Pradesh

The massive state of Uttar Pradesh can expect a considerable jump in job creation because of its large labour-intensive base in leather and crafts.

This includes the leather footwear exporters in Kanpur and Agra, furniture and handicraft exports from Sahranpur, electronics manufacturing in Noida, and agri-products from the Western UP.

Punjab

In Punjab, Ludhiana’s garments and knitwear exports, Jalandhar’s is sports goods, and Mandi Gobindgarh’s light engineering units all stand to benefit from the FTA while giving an impetus to industrial jobs and ancillary supply chains.

Rajasthan

Rajasthan has long struggled with market access despite craft and manufacturing clusters that are export-ready – a situation that will be remedied by the FTA.

Apart from that jewellery exports from Jaipur, wooden furniture and handicrafts from Jodhpur, sports goods form Churu, as well as textiles such as Bandhej and leather goods will also find new markets in EU, spreading benefits across MSMEs and artisan communities.

Kerala

The state of Kerala stands to benefit through high-demand food and spice categories.

Shrimp and tuna exports from Kochi, spices like pepper and cardamom from Idukki and Wayanad will all benefits from a preferential access to a much larger EU market.

Assam

In Assam farmers and artisans will directly reap the benefits of the FTA with capabilities for tea exports expanding in Dibrugarh–Jorhat, The spices from Upper Assam and bamboo-based furniture, handicrafts from Barpeta and Nalbari, and niche pharmaceutical exports are all poised to witness a substantial growth.

Also Read: ‘New Chapter In Global Economic Cooperation’: PM Modi Hails India-EU FTA