India’s Auto And Marine Exports Jump Before EU Trade Deal Signing

India’s vehicle and marine exports to the European Union (EU) recorded strong growth of over 25% during the April–December period of FY26, even before the India–EU Free Trade Agreement (FTA) became operational.

Vehicle exports to the EU surged more than 50% to $2.2 billion in the first nine months of 2025-26. This pushed the EU’s share to 11.6% of India’s total automotive exports of $19.5 billion.

Automotive component exports, including engines and parts, also grew 28.1% to $725 million. The EU’s share in this segment rose to 4.1%, compared with 2.9% a year ago.

Marine exports to the EU, covering fish, crustaceans, molluscs and related products, increased 26.5% to $982 million. Cereal exports jumped 87% year-on-year to $339 million, while gums, resins and vegetable saps rose 20.9% to $173 million. Tea, coffee and spices exports remained largely flat at $773 million.

Why Did Overall Exports To The EU Decline?

Despite strong growth in select categories, India’s overall exports to the EU fell 3.92% to $55.1 billion during April–December.

The contraction was primarily due to a 23.3% decline in petroleum product exports to $9.4 billion and a sharp 46.2% drop in telecom instrument shipments to $3.2 billion.

What Will Change After India–EU FTA Becomes Operational?

India has preferential access to 97% of the tariff lines (99.5% of the trade value) under the India-EU FTA signed on 27 January 2026. The agreement will take effect upon ratification by both parties, with efforts underway to complete the process this calendar year.

Once operational:

• 70.4% of tariff lines, covering 90.7% of India’s exports, will see immediate duty elimination. This includes textiles, leather, footwear, tea, coffee, spices, sports goods, toys, gems and jewellery, and certain marine products.

• 20.3% of tariff lines, covering 2.9% of India’s exports, will receive zero-duty access over 3–5 years, including select marine products, processed foods, and arms and ammunition.

• 6.1% of tariff lines, covering 6% of India’s exports, will receive preferential access through tariff reductions or quota-based arrangements. This includes poultry, preserved vegetables, bakery products, cars, steel, and certain shrimp and prawn products.

• Officials expect agriculture exports to benefit significantly from preferential or zero-duty access once the deal is implemented.

Also Read - Auto Industry Growth Seen at 3–6% in FY27

What Does This Mean For Investors?

The rapid increase in the exports of vehicles, components and marine products shows that the EU market is responding well to its demand even prior to the implementation of tariff benefits.

When FTA is implemented, immediate elimination of duties on textiles, marine products, gems and jewellery, and footwear may improve competitiveness in these sectors.

The implementation schedule and effect of the FTA on the export-intensive industries will be of interest to the investors.

Sources

Financial Express

The Hindu