India-EU FTA removes import duty on textile, leather in relief from 50% US tariffs

The removal of import duty on Indian textile and leather goods increases scope of sourcing by EU garment and shoe makers.

The India-EU trade deal has eliminated tariff on Indian textile and leather exports to the European Union, in what is seen as significant relief to the sectors battered by 50% import duty imposed by the US.

A woman working at a textile unit in India (HT_PRINT)

The new tariff rates are:

• Textile, Apparel and Clothing: 0% tariff vs 12% earlier
• Leather and Footwear: 0% tariff from 17% earlier

India-EU FTA: Impact on textile Industry

The 0% import duty makes Indian apparel and textile meaningfully cheaper on European shelves—that means larger orders for Indian garment makers in the manufacturing hubs of Tirupur in Tamil Nadu to Ludhiana in Punjab, people familiar with the matter said.

Essentially, Indian garment makers now have full access to EU's $263.5-billion textile market, where exports are currently valued at $7.2 billion.

India-EU FTA: Impact on leather industry

The 0% import duty will allow EU's $100-billion leather and footwear industry to increase sourcing from India—notably from the clusters of Agra-Kanpur in Uttar Pradesh and Vellore-Ambur in Uttar Pradesh—thereby creating formal jobs and new enterprises in these regions.