EU-India FTA: Textile Opportunity Meets Sustainability Challenge

• The EU-India FTA eliminates tariffs up to 10-12% on Indian textile exports, potentially doubling or quadrupling current exports of $7.2 billion to Europe.
• Alongside tariff benefits, the EU's strict sustainability regulations, like the EUCSDDD, pose a new compliance challenge for Indian textile exporters.
• The EUCSDDD requires companies to verify their entire supply chain is free from human rights abuses and environmental harm, shifting from a checklist to an operating model change.
• Indian MSMEs face significant challenges in meeting these new due diligence norms due to lack of capabilities and need for substantial investment and operational changes.
• Five key areas for support include practical capacity building, traceability and digital readiness for MSMEs, credible grievance handling, environmental upgrades, and decarbonization efforts.

Why It Matters: The EU-India FTA offers huge textile export potential, but sustainability compliance is crucial for success.