Piyush Goyal says the India-EU FTA will eliminate textile duties, protect farmers and autos, boost Make in India, create jobs and neutralise carbon tax risks, positioning India on equal global footing. Can India now compete with countries like Vietnam and Bangladesh?
Union Minister of Commerce and Industry Piyush Goyal on Friday said the India-European Union Free Trade Agreement (FTA) will be a “game-changer” for India’s exports, jobs and manufacturing, while fully protecting the interests of farmers and key domestic industries.
Speaking in an interview with news agency ANI, Goyal said the agreement will place India on an equal footing with countries like Bangladesh and Vietnam, particularly in the textile sector, which has long faced duty disadvantages in the European market.
Zero duty to boost textile exports, jobs
Goyal said India earlier paid duties of up to 12 per cent on textile exports to Europe, while competitors like Bangladesh and Vietnam enjoyed zero-duty access due to special trade arrangements.
“We used to always hear the story of why Bangladesh or Vietnam exports so much more than we do. It was always because Bangladesh, being a less developed country, had zero duty. Vietnam had an FTA, so it had zero duty in Europe. We used to pay duty up to 12 per cent,” he said.
Under the India-EU FTA, all textile products will attract zero duty from day one, he said, allowing Indian exporters to compete on equal terms.
“Now that will become zero from day one. All textile products, as soon as the FTA becomes effective, will be zero duty. Now we can compete on an equal footing,” Goyal said, adding that India should aim for $30–50 billion in textile exports.
“I see no reason why we should not be aspiring to do 30, 40, 50 billion of textile exports, which will create lakhs of jobs at any cost,” he said.
Farmers and agriculture fully protected
Addressing concerns over the impact of the trade deal on farmers, Goyal said there was “absolutely no problem” for the agricultural sector.
“On the contrary, new markets open up for them,” he said, adding that key agricultural and animal husbandry products have been excluded from the agreement.
“Our rice, wheat, soy, maize, corn, dairy products, cereals, pulses, and all such commodities produced in India have been excluded from this agreement. The agricultural sector and the animal husbandry sector are completely protected under this agreement,” he said.
Auto sector safeguarded, local manufacturing encouraged
Goyal said the Indian automobile industry remains fully protected under the FTA, with no opening for mass-market cars.
“We haven’t opened up the market for cars that sell for up to 25-30 lakh rupees. We have protected the auto industry completely,” he said.
He added that allowing limited entry of luxury cars could eventually lead to local manufacturing and job creation.
“If we allow luxury cars to enter the market here, and they see even a small market share, then they will eventually be manufactured here as well,” he said, noting that European manufacturers find manufacturing in India more profitable.
Big boost to ‘Make in India’
The minister said the agreement will give a major push to the ‘Make in India’ initiative by opening access to a vast European market.
“This will essentially open up a massive market for ‘Make in India’ – a market of 27 countries, which is five times larger than India’s own market,” Goyal said.
He said the agreement will help Indian manufacturers achieve economies of scale, offer better quality and more affordable products to consumers, and expand global reach for Indian goods and services.
Carbon tax concerns addressed
Responding to criticism that Europe’s carbon tax could offset the benefits of the FTA, Goyal said India has secured strong safeguards.
“There will be most forward nation clause. If they give any concessions to any country on the carbon tax, we will get it simultaneously,” he said.
He added that a technical committee will review carbon pricing in both regions and ensure credit for carbon taxes already paid in India, without the need for verification in Europe.
“They also recognise that India is rapidly moving up the value chain in terms of green energy and sustainable manufacturing practices,” Goyal said, adding that the agreement promotes joint cooperation to decarbonise the economy.
