India-EU Trade in Sight: Jefferies Names 4 Sectoral Winners for Stock Market Investors
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- Last Updated: 22 Jan 2026 at 2:30 PM IST
India and the European Union are close to signing a historic Free Trade Agreement (FTA) after nearly 20 years of talks, with officials and analysts calling it the most advanced stage the deal has ever reached. European Commission President Ursula von der Leyen said the pact is just a few steps from being signed, adding that it could create a market of nearly 2 billion people and account for around 25% of global GDP.
Jefferies, in its recent report, named four sectors that would be the biggest winners in the case of a trade pact between India and the EU: textiles, automotive, electronics, and pharmaceuticals. But since some issues still need to be resolved, one question remains open. Will the final deal meet economic expectations while addressing regulatory and non-tariff barriers?
What Does Jefferies Highlight as Sectoral Winners?
Jefferies has reported that the envisaged trade agreement between India and the European Union is likely to work wonders for the Indian exporters in the following four sectors:
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Textiles: This sector could benefit the most as the European market becomes more open, and lower tariffs may favour Indian textiles.
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Automotive: Manufacturers of cars and auto parts could profit if the movement of goods becomes easier and customs duties are reduced.
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Electronics: The opening up of technology markets in Europe may lead to a rise in exports of Indian electronics.
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Pharmaceuticals: The pharmaceutical industry might gain from more consistent regulations and reduced tariffs.
Jefferies concentrated on industries where India’s competitive strengths align with European consumer demand, while India is seeking to transform its export base.
Why the India–EU Trade Partnership Is Significant
The trade between India and the EU is already an important economic partnership, highlighted by the fact that India’s annual goods trade with the EU stands at around USD 130 billion, comparable to trade with the US and China.
India’s goods exports to the EU are annualised at about USD 75 billion, accounting for 17% of total exports and around 80% of exports to the US. Besides, the exchange of services and investments is another considerable aspect of economic cooperation between the two regions.
Potential Implications for Investors
For stock market investors, a finalised trade agreement can be interpreted as a signal of potentially brighter earning prospects for firms in the aforementioned sectors, since factors such as lower tariffs, greater export markets, and healthier cross-border value chains may work in their favour. Jefferies has mentioned that textiles, automotive, electronics, and pharmaceuticals, among others, could be affected if the agreement is reached and subsequently enforced.
Nonetheless, the investors’ faith could probably be dependent on the specifics of the agreement, including the way it handles non-tariff barriers and the services trade. This takes us to the last question. If the trade deal is signed off and implemented according to the market expectations, will the investor's upbeat sentiment be rewarded?
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