EU trade pact could redirect India’s top US-bound goods, unlock $10-11 billion exports: Report
Despite the EU’s $21.1 trillion economic size and $5.4 trillion in external goods trade, India’s share remains modest — around 2.9% of the EU’s imports and 1.9% of its exports. Additionally, over 70% of India’s exports to the EU go to just five member states.
- Jan 23, 2026,
- Updated Jan 23, 2026 9:05 PM IST
India could unlock $10-11 billion in additional exports to the European Union by redirecting a portion of its heavily tariffed US-bound goods, according to a new report by Rubix Data Sciences. The opportunity arises from the proposed India-EU Free Trade Agreement (FTA), which could enable a strategic shift in trade flows without needing fresh production capacity.
India’s top 15 product categories exported to the US account for nearly $45 billion, with $21 billion concentrated in 12 segments that currently have limited penetration in the EU. Even if half of these flows are gradually reoriented toward the EU through tariff reductions, rules-of-origin alignment, and improved market access, the shift could reshape the stagnant India-EU trade relationship.
The report comes at a crucial time. Bilateral goods trade between India and the EU has remained flat at around $136.5 billion annually from FY2023 to FY2025. This stagnation persists even as the EU edged past the US to become India’s largest bilateral goods trading partner in FY2025. The EU’s suspension of export benefits for certain Indian products under the Generalised Scheme of Preferences (GSP) has added urgency to diversify and deepen trade engagement.
Despite the EU’s $21.1 trillion economic size and $5.4 trillion in external goods trade, India’s share remains modest — around 2.9% of the EU’s imports and 1.9% of its exports. Additionally, over 70% of India’s exports to the EU go to just five member states, increasing vulnerability to economic slowdowns in these markets.
Trade complexities extend beyond Europe. The EU’s goods trade surplus with the US hit $164 billion in 2024, but renewed tariff threats have prompted the bloc to diversify its trade partnerships — offering India a timely opening.
Tariff asymmetries remain a key friction point. Indian exports in sectors like textiles and apparel face EU duties of 12-16%, while EU exports to India are subject to average tariffs of about 9.3%, especially impacting automobiles and industrial goods.
Beyond trade, the EU is also a major investor in India, with cumulative FDI of $119.2 billion from April 2000 to December 2024, representing 16.5% of total inflows. Deeper FTA commitments on services, investment protection, and regulatory cooperation could further strengthen this economic relationship.
Rubix frames the proposed FTA as more than a diplomatic milestone — it sees it as a chance for India and the EU to reset economic ties amid shifting global trade dynamics.
India could unlock $10-11 billion in additional exports to the European Union by redirecting a portion of its heavily tariffed US-bound goods, according to a new report by Rubix Data Sciences. The opportunity arises from the proposed India-EU Free Trade Agreement (FTA), which could enable a strategic shift in trade flows without needing fresh production capacity.
India’s top 15 product categories exported to the US account for nearly $45 billion, with $21 billion concentrated in 12 segments that currently have limited penetration in the EU. Even if half of these flows are gradually reoriented toward the EU through tariff reductions, rules-of-origin alignment, and improved market access, the shift could reshape the stagnant India-EU trade relationship.
The report comes at a crucial time. Bilateral goods trade between India and the EU has remained flat at around $136.5 billion annually from FY2023 to FY2025. This stagnation persists even as the EU edged past the US to become India’s largest bilateral goods trading partner in FY2025. The EU’s suspension of export benefits for certain Indian products under the Generalised Scheme of Preferences (GSP) has added urgency to diversify and deepen trade engagement.
Despite the EU’s $21.1 trillion economic size and $5.4 trillion in external goods trade, India’s share remains modest — around 2.9% of the EU’s imports and 1.9% of its exports. Additionally, over 70% of India’s exports to the EU go to just five member states, increasing vulnerability to economic slowdowns in these markets.
Trade complexities extend beyond Europe. The EU’s goods trade surplus with the US hit $164 billion in 2024, but renewed tariff threats have prompted the bloc to diversify its trade partnerships — offering India a timely opening.
Tariff asymmetries remain a key friction point. Indian exports in sectors like textiles and apparel face EU duties of 12-16%, while EU exports to India are subject to average tariffs of about 9.3%, especially impacting automobiles and industrial goods.
Beyond trade, the EU is also a major investor in India, with cumulative FDI of $119.2 billion from April 2000 to December 2024, representing 16.5% of total inflows. Deeper FTA commitments on services, investment protection, and regulatory cooperation could further strengthen this economic relationship.
Rubix frames the proposed FTA as more than a diplomatic milestone — it sees it as a chance for India and the EU to reset economic ties amid shifting global trade dynamics.