India and the European Union are set to announce a long awaited free trade agreement (FTA) on Tuesday 27 January 2026. The deal is expected to reshape how Indian exporters compete in Europe especially in labour heavy sectors.
Indian industry wants zero duty access for textiles, marine products. sports goods, toys, footwear, leather and leather products. These sectors create jobs and face tough competition from Bangladesh, Vietnam and Pakistan which already enjoy duty free access to the EU.
According to Times of India, Trade data between April and November 2025 India’s exports to the EU fell to $67.4 billion from $72.7 billion a year earlier. Imports rose to $44.3 billion pushing the trade surplus down to $23.1 billion.
India mainly exports finished labour intensive products to Europe. The EU exports mainly machinery, aircraft, electronics, chemicals and scrap that feed Indian factories MSMEs and recyclers.
Now if we look at the Indian leather industry, Council for Leather Exports – India, believes exports will increase sharply if the duties are removed.
“Our competitors from Pakistan and Bangladesh get zero duty access in EU With the FTA we are likely to get the same benefit. We expect our exports to EU to rise from the current $2.25 billion to $6 billion by 2030”
– Ramesh Juneja Chairman Council for Leather Exports
India’s leather industry already has a strong global footprint. Indian leather, leather products and footwear are exported to more than 150 countries showing wide acceptance across developed and emerging markets.
In FY 2023-24 India exported $4.69 billion worth of leather, leather products and footwear. What stands out is Europe’s dominance among key buyers.
Out of India’s top 10 leather export destinations 7 are European Union countries. These are Germany, Italy, France, Spain, Belgium, Netherlands and Poland.
Together these 7 EU countries imported leather, leather products and footwear worth about $1.61 billion from India in FY 2023-24. Within the top 10 destinations the EU alone accounts for around 34% of India’s total leather exports.
Germany is the largest EU buyer of Indian leather, leather products and footwear with imports of $535 million. Italy follows at $319 million. France, Spain, Belgium, Netherlands and Poland together add another $756 million in FY 2023-24.
This shows that demand is spread across Western and Central Europe and not limited to one country.
The top three markets overall USA, Germany and UK account for 42.42% of India’s leather exports. This confirms that Indian leather is already strong in regulated high value markets.
The India EU trade deal is not just about tariffs. It is about job creation, competitiveness and where India stands in global supply chains over the next decade.
