The recently concluded India–European Union Free Trade Agreement is expected to deliver mutual gains for manufacturing in both regions, according to the Economic Survey 2025–26. The agreement is likely to support the revival of select manufacturing segments in Europe while enhancing India’s industrial competitiveness, export resilience and long-term strategic capabilities.
The survey, tabled in Parliament by Finance Minister Nirmala Sitharaman on Thursday, January 29, underlined that the benefits of trade agreements ultimately depend on a country’s ability to produce efficiently and competitively.
Highlighting sector-specific impacts, the survey projected a sharp rise in gems and jewellery exports to the UK following the signing of the India–UK Free Trade Agreement. It noted that stronger performance in the UK market could also create positive spillover effects across other existing and emerging export destinations.
The document pointed to India’s broader push to diversify export markets through an expanding network of trade agreements. India has concluded FTAs with partners such as the UK under the Comprehensive Economic and Trade Agreement (CETA) and Oman through the Comprehensive Economic Partnership Agreement (CEPA), while continuing negotiations with the US, Chile and Peru.
According to the survey, this widening FTA footprint provides Indian exporters with more stable and predictable market access at a time of heightened global trade uncertainty. It added that such agreements help export-oriented firms scale up production and integrate more deeply into global value chains.
By increasing exposure to international competition, the survey said FTAs also encourage firms to improve productivity, quality and reliability, shifting focus away from dependence on preferential access alone and towards sustainable competitiveness.
