The Southern India Mills’ Association (SIMA) has welcomed the successful conclusion of the India European Union Free Trade Agreement, describing it as a historic and strategic breakthrough for India’s trade future. The pact connects India, the world’s fourth largest economy, with the EU, the second largest, creating a major framework for deeper economic cooperation, trade expansion and supply chain resilience.
Talks that began in 2007 had faced prolonged delays. However, renewed momentum under the leadership of the Hon’ble Prime Minister Shri Narendra Modi ji and the sustained efforts of the Hon’ble Union Minister of Commerce and Industry Shri Piyush Goyal ji have led to the finalisation of the agreement. SIMA noted that the timing of the deal, around the 77th Republic Day, adds symbolic value and signals a new phase in India EU economic engagement.
The agreement gains further importance amid global trade instability and uneven tariff regimes in key markets. According to SIMA, the FTA will improve competitiveness for both India and the EU while strengthening economic stability in a volatile trade environment.
In a press release issued here today, Mr. Durai Palanisamy, Chairman, The Southern India Mills’ Association (SIMA), has highly appreciated and complimented the Hon’ble Prime Minister Shri Narendra Modi ji and the Hon’ble Union Minister for Commerce and Industry, Shri Piyush Goyal ji, for this landmark achievement between India and the European Union.
He stated that the India–EU Free Trade Agreement would provide a significant boost to the Indian textile and clothing industry, with the ready-made garments, home textiles, technical textiles, and fabrics segments emerging as the major beneficiaries.
Mr. Durai further stated that India’s annual exports of textiles and clothing to the European Union are valued at around USD 8 billion, accounting for nearly 6 per cent of the EU’s total textile and apparel imports. He noted that the conclusion of the India–EU FTA would enable India to effectively compete with key supplier countries such as Bangladesh, Turkey, and Vietnam, which currently command shares of about 21 per cent, 10 per cent, and 5 per cent respectively. He added that the agreement would also strengthen India’s ability to compete with China, which remains the largest supplier to the EU with a share of around 29 per cent.
SIMA also highlighted recent policy measures aimed at strengthening textile competitiveness. These include removal of anti-dumping duties and quality control orders on man-made fibres and raw materials, reduction of GST on man-made fibres and filaments, alignment of the textile value chain under the lower tax slab, and continued support through duty refund schemes and financial relief measures.
Tamil Nadu, which accounts for nearly 29 per cent of India’s textile exports to the EU at about USD 2.3 billion, is expected to benefit significantly. SIMA emphasised that clusters such as Tiruppur and Karur could see strong export growth, especially in knitted garments and home textile products. The agreement is also expected to facilitate technology transfer, product development expertise and access to advanced textile machinery from Europe, further strengthening manufacturing capability.
SIMA noted that India currently imports textile machinery worth nearly USD 2.62 to 3 billion from EU countries, and improved trade terms could enhance technology adoption. The association stressed the need for swift implementation of FTAs, including the UK pact, within six to eight months to help the industry recover from reduced capacity utilisation of 20 to 25 per cent and to restore employment across the value chain.
Mr. Durai stated that the India EU FTA would be a game changer, supporting the vision of increasing the textile industry size from USD 172 billion to USD 250 billion and exports from USD 37 billion to USD 100 billion by 2030, while attracting new investments and generating large-scale employment, particularly in rural regions and among women workers.
