Speaking to ET Now, Ganapathi said the India-EU FTA will give Indian textile manufacturers duty-free access to the European market, placing them on a level playing field with competing nations such as Bangladesh, Sri Lanka and Vietnam. “The EU is a very large market, with textile imports of around $70–80 billion. Duty-free access provides a significant opportunity, particularly in light of the challenges we are facing in the US,” he said.
Relief, not a replacement for the US market
While the FTA is expected to ease some of the pressure caused by US tariffs, Ganapathi clarified that Europe cannot fully replace the US as a destination market. “It may not exceed the impact of the US market, but it will definitely help combat the challenges we are facing. Europe is almost equally large, and the opportunity is sizable. However, the US remains critical, and we still need a favourable resolution there,” he noted.
Currently, around 15% of Gokaldas Exports’ revenue comes from Europe. Ganapathi expects this share to rise substantially once the FTA is implemented, driven by higher volumes and improved competitiveness.
Margins likely to improve
Exports to the EU are expected to be margin-accretive for Indian textile players. Ganapathi explained that Indian exporters currently face a cost disadvantage of nearly 12% compared to some competing countries. “The duty benefit will bring in volumes and allow us to price better. That should help us improve margins while also opening up a larger segment of the European market,” he said.
Focus remains on US and Europe
Gokaldas Exports continues to rely primarily on the US and European markets, including the UK, which remains an important destination despite not being part of the EU. Other geographies contribute only marginally to revenues. “Retailers in other markets are smaller and difficult to access at scale. For now, they cannot offset the importance of the US or EU,” Ganapathi said.
On potential government support if US trade negotiations are delayed, Ganapathi refrained from speculating but said the government is aware of the sector’s challenges. “There are ongoing discussions. The government is sympathetic to the issues faced by the industry, and we will have to wait for announcements, including those linked to the Budget,” he added.For India’s textile exporters, the India-EU FTA offers timely relief, improved competitiveness and a chance to diversify export growth while global trade uncertainties persist.