Domestic cos need strategic approach to tap India-Europe FTA gains: FICCI

BERLIN: Indian companies need to adopt a more strategic approach to the European market to fully benefit from the free trade agreement, as tariff concessions alone will not lead to higher exports, industry chamber FICCI said on Thursday.

FICCI Secretary General Anant Swarup said the real challenge would be to convert improved market access into sustained market penetration.

He said that although the agreement, concluded in January, presents an unprecedented opportunity for Indian MSMEs to expand their presence in the European market, tariff concessions alone will not translate into higher exports.

"Indian companies will need to adopt a more strategic approach to the European market. This includes identifying products where tariff advantages are significant, building relationships with European buyers, upgrading product quality, and integrating into European supply chains," he told PTI.

Swarup is accompanying Commerce and Industry Minister Piyush Goyal, who is on a two-day visit here to boost trade and investment ties between India and Germany, its largest EU trading partner.

He said that MSMEs can also benefit by becoming suppliers to larger Indian and European companies, particularly in sectors such as textiles, leather, engineering components, chemicals and processed foods.

He noted that compliance with European standards will remain one of the most critical determinants of export success.

EU requirements relating to product safety, technical standards, sustainability, traceability and carbon emissions can be particularly challenging for smaller enterprises, he said, adding the EU's evolving regulatory framework, including CBAM (carbon border adjustment mechanism) and other sustainability-related requirements, will require Indian businesses to invest in cleaner technologies, certification and compliance systems.

Three areas of support will be particularly important: information and market intelligence, testing and certification infrastructure, and technology and financial support, he said.

He elaborated that industry needs practical, product-specific guidance on tariff concessions, rules of origin, regulatory requirements and export opportunities.

Dedicated FTA helpdesks, sector-specific advisory services and buyer-seller platforms can bridge this information gap.

"India must expand internationally accredited testing laboratories and certification facilities, particularly in major export clusters. Greater cooperation between Indian and European conformity assessment bodies can help reduce duplication, costs and delays," the Secretary General said.

MSMEs will need access to affordable finance, modern technology, digital traceability systems and support for meeting environmental and sustainability standards.

He added that shared facilities and targeted technology-upgradation programmes can make these investments more affordable.

"The FTA provides an institutional framework for regulatory dialogue and cooperation. This should be actively leveraged to address technical barriers, improve transparency and facilitate greater recognition of testing and certification systems wherever feasible," Swarup said.

He also said that Indian firms should look at the FTA beyond immediate tariff benefits as it can catalyse European investment into India, encourage technology partnerships, strengthen integration into global value chains and support diversification of our export markets.

"The real opportunity is not simply to export more to Europe, but to position India as a trusted manufacturing and services partner in European supply chains. This can deliver sustained gains in investment, production, employment and technological capabilities," he added.

India and the EU announced the conclusion of negotiations for the free trade agreement on January 27.

It is expected to be signed in December this year and may come into force next year.

India's exports to EU countries dipped by 4.57 per cent to USD 72.4 billion in 2025-26 from USD 75.85 billion in 2024-25.

These countries accounted for about 17 per cent of India's total merchandise shipments in the last fiscal.

Imports, on the other hand, rose by 9 per cent to USD 66.18 billion in 2025-26 from USD 60.68 billion in 2024-25.

These countries accounted for about 9 per cent of India's total merchandise imports in the last fiscal.

The trade gap was in the favour of India. Some of the European nations are major investors in India and they include The Netherlands, Germany, France, Spain, Belgium, Italy, Sweden and Denmark.