Leading European brands to boost sourcing from India spurred by the India EU FTA

Pune: Leading European brands and supermarket chains such as Zara, Ikea, OVS, JYSK, Carrefour, LIDL, ALDI, and C&A could significantly boost sourcing from India spurred by the free trade pact with the European Union, which will provide duty free access to Indian apparel and textile exports.

Exporters, currently supplying these brands from Bangladesh and Vietnam, believe that India will now level the playing field with its regional rivals. The industry is confident of even expanding capacities within months to serve any sharp spike in demand from Europe.

Industry projections estimate a 20-25% annual surge in India’s apparel exports after the FTA is implemented, doubling in three years, against the current modest growth rates of about 3%.


"With the European Union continuing to tighten requirements around ESG compliance and end-to-end traceability, we believe that India is well positioned to emerge as a stronger sourcing destination," said Pallab Banerjee, managing director, Pearl Global Industries, a supplier to brands like PVH, known for Tommy Hilfiger and Calvin Klein; Walmart, Target, and Spain’s Inditex which owns Zara and Berksha brands.

Historically, India’s apparel exports have faced a disadvantage in the EU due to tariff-free access enjoyed by competing countries. This differential impacted India’s price competitiveness despite strong capabilities in quality and compliance.

Ahead of the FTA finalisation, top European brands have begun exploring and assessing Indian manufacturing capabilities in the last few months, said leading exporters.

Vijay Aggarwal, chairman, Cotton Textile Export Promotion Council (TEXPROCIL) said, "Leading global brands such as IKEA, JYSK, Carrefour, LIDL, ALDI, C&A, among many others, are expected to increasingly source competitive and high-quality products from India under the preferential framework of the FTA."

Gokaldas Exports, a leading apparel exporter, confirmed that several European brands are starting to show interest in sourcing from India. “The European brands have already started socialising with us, exploring our supply ecosystem. However, it will pick up momentum when they see the real commercial benefits after the deal is ratified,” said Sivaramakrishnan Ganapathi, MD, Gokaldas Exports.

The FTA is also expected to benefit Indian customers. “The India–EU FTA is a positive step for both retailers and consumers. For our business model where we combine local sourcing with selective imports, it enhances flexibility, improves cost structures and ultimately allows us to offer better value and wider choice to Indian customers,” said Nitin Chhabra, chief executive of Ace Turtle, the India master franchisee for global brands including Lee, Wrangler and G-STAR.

Indian manufacturers, on their part, are confident of expanding capacities to meet any export demand surge. "It is expected to catalyse fresh investments in advanced synthetic raw materials, modern processing technologies and capacity expansion across the textile and apparel value chain," said Banerjee.

EU is the world's largest apparel importer, totalling $202.8 billion in FY25. While the EU has about a 28% share in India’s apparel exports, India’s share is only 2.9% in the European apparel market.

The textile industry also expects to benefit from imports of advanced machines from the EU. "Except spinning machinery, the majority of the state-of-the-art technology weaving machines, processing machines, technical textile manufacturing machines, critical textile spares and accessories being imported from the EU would also gain advantage and improve the competitiveness," said Durai Palanisamy, executive director, South Indian Mills Association. India currently imports around $2.62-3 billion worth of textile machinery from EU countries.