By The new trade agreement between India and the EU, already known in the international trade community as the “mother of all free trade agreements,” not only lowers tariffs but will also significantly impact the shipbuilding, repair, and recycling industries. The increase in trade between the two economies is expected to boost maritime transport activity. Seaports must prepare for the increased supply of containers to and from Indian ports.
The EU is India’s largest trading partner, with the value of goods trade with the EU reaching €120 billion in 2024. This represents 11.5% of India’s total trade. India is the EU’s ninth-largest trading partner, accounting for 2.4% of the value of EU goods trade with the global market. EU-India trade in services reached €59.7 billion in 2023, up from €30.4 billion in 2020.
The Indian government calls the agreement with the European Union the “MOTHER OF ALL DEALS” and considers it “a significant milestone in one of India’s most strategic economic partnerships.” The agreement is “designed as a modern trade partnership and responds to contemporary global challenges, while enabling deeper market integration between the world’s fourth- and second-largest economies,” states the Indian government’s special publication, “MOTHER OF ALL DEALS” UNLOCKING OPPORTUNITIES EMPOWERING INDIA@2047.
The European Commission also highlights the strategic importance of the agreement. It emphasizes that “the free trade agreement grants privileged access for EU exports to the world’s most populous country, with 1.45 billion people.” Because the agreement eliminates or reduces tariffs on over 96% of EU exports, the European Commission estimates it will potentially double EU exports to India by 2032. The main benefits are estimated at around €4 billion a year in tariff savings for India on European products. This is the amount by which sales to this nearly €1.5 billion market could increase.
The Potential of India’s Shipbuilding Industry. Source: Ship Building & Repair – Catalyst for Economic Growth. Presentation by the Ministry of Ports, Shipping and Waterways. Mumbai, 2025
India Betting on the Shipbuilding Industry
However, it won’t be easy. The India-EU FTA introduces strict regulations on environmental standards, IT industries and their use for business intelligence, and sustainable industrial development. These and other conditions of economic cooperation are forcing maritime industry managers to significantly adjust their development strategies. India has a program to participate in receiving a share of the shipbuilding pie, worth approximately USD 70 billion. Specific financial and organizational support has been planned.
The Japan Times notes with concern that “India is striving to become a shipbuilding powerhouse.” They base their observation on the fact that Indian Prime Minister Narenda Modi’s cabinet approved the agreement in September of last year. A nearly $9.6 billion package is expected to help Indian shipyards compete with global shipbuilding giants in China, Japan, and South Korea.
The ambitious industrial program is part of a multi-pronged approach to strengthen the South Asian country’s shipbuilding capabilities, improve long-term financing, and promote the development of domestic shipyards. India is seeking to enhance resilience and strategic self-sufficiency as it strives to become a global maritime power.
New Delhi announced the launch of a $3 billion Maritime Industry Development Fund, which will provide long-term financing for the maritime sector, including the acquisition of new ships and the rapid development of seaport infrastructure. An additional $2.4 billion will be allocated to a program aimed at increasing annual shipbuilding capacity to 4.5 million GT.
The funds will also be used to establish a ship technology center and support the creation of large shipbuilding clusters. “Leader shipyards will be established across the country to produce ships, and [government-backed – Ministry of Economy] subcontractors will produce or manufacture all their equipment and parts,” T.K. Ramachandran, secretary of India’s Ports, Shipping and Waterways sector, told reporters after the Indian government announced the shipbuilding programme.
India’s exports to the EU market. Source: India-EU Trade CouncilCourse for the EU market
India has gained preferential access to European markets, covering 97% of items previously subject to customs restrictions. These account for 99.5% of export value, according to calculations by the Department of Commerce and Industry. Trade analysis shows that by 2026, 70.4% of tariff-covered items produced in India’s textile and leather industries, including footwear, will be eliminated. It is worth noting that virtually all leading brands have established their presence in India. Recall that Bata paved the way to India in the first half of the 20th century.
Traditional exports – tea, coffee, and spices – will arrive in European Union ports duty-free in containers. At container terminals, shipping documents will include a significant number of sporting goods, toys, and, to a lesser extent, precious stones and jewelry. Some products produced by the maritime industry will also be affected, including frozen products from the rapidly growing aquaculture industry.
Analysis by the Department of Commerce and Industry shows that 20.3% of tariff-covered items, representing 2.9% of India’s exports, will be exempt from tariffs for three to five years. This applies to certain marine products, processed foods, and arms and ammunition. Only 6.1% of tariff-covered items, representing 6% of India’s exports, will be granted preferential access in the form of tariff reductions on certain poultry products, canned vegetables, bakery products, and others. In this case, tariff-rate quotas (TRQs) have been introduced for cars, steel, certain shrimp products, and others.
Żródło: EurostatThe EU – an open market
For India, opening the EU market to products produced by key sectors requiring significant labor input will be important. This does not mean that products offered to the European market will be less technologically advanced. The Indian government is allocating significant funds for innovation and innovative industries. Special programs have been launched.
In 2026, European ports will see increased supplies of more than just textiles, clothing, and maritime products. The Indian government believes that the leather, footwear, and chemical industries will significantly benefit from the EU-India agreement. Plastic and rubber products, sporting goods, and the aforementioned toys and jewelry will flow into the European Union.
The reduction in tariffs will increase the inflow of goods, which generated export revenues worth over 2.87 trillion Indian rupees (USD 33 billion) in 2025. Until January 2026, these goods were subject to tariffs ranging from 4% to 26%. For the EU, an increase in supplies of even a few percent will have a significant impact on port transshipments and the balance of the industrial and consumer markets. The Indian government clearly notes that the elimination of tariffs “is crucial for job creation.”
Opening the Indian market to EU producers offers an opportunity to enter the dynamically growing industrial and consumer markets with a wide range of products. Opening the EU market to Indian goods “will increase competitiveness in the EU market.” It was noted that Indian producers have prepared for the opening of the EU market, and “These sectors are ready to benefit from tariff liberalization and increased competitiveness, enabling deeper integration with global and European value chains while creating jobs.”
India will export more than just textiles, luxuries, and jewelry to EU countries. India is also a country producing highly processed goods with a high level of innovation. The EU-India FTA is expected to boost India’s exports of processed goods to the EU, which amounted to approximately $16.6 billion in 2025. The FTA is expected to strengthen and invigorate industrial centers, and exports to the EU will stimulate the modernization of India’s industry and its global competitiveness. This will be visible as early as 2026 in European industrial plants and stores, in the maritime transport and logistics market, in shipyards, and in seaports.
Eksport UE do Indii w 2024 r. źródło: EUROSTAT. Grafika: Network18 Creative