How can a Free Trade Agreement between India and the European Union impact different sectors of the Indian economy?

A Free Trade Agreement (FTA) between India and the European Union (EU) would reduce tariffs and trade barriers, aiming to boost economic ties. The impact on Indian sectors like agriculture, manufacturing, and services could be significant, with both opportunities and challenges arising from increased market access and competition.

Agriculture
• Positive Impact: Indian agricultural products such as spices, tea, coffee, and marine products could get better access to the large EU market, potentially increasing exports and farmers’ incomes.
• Negative Impact: Indian farmers may face stiff competition from highly subsidized and efficient EU agricultural producers, which could hurt small and marginal farmers. There may also be stricter EU standards on quality and safety, making compliance challenging for Indian exporters.

Manufacturing
• Positive Impact: Sectors like textiles, garments, leather, and automobiles could benefit from reduced tariffs, leading to higher exports and more employment opportunities.
• Negative Impact: Indian manufacturers, especially small and medium enterprises (SMEs), may struggle to compete with advanced European products. This could lead to increased imports and pressure on domestic industries.

Services
• Positive Impact: The FTA could open up the EU market for Indian IT, software, and professional services, boosting revenues and job creation. There may also be easier movement for Indian professionals.
• Negative Impact: Indian service providers may face non-tariff barriers such as complex visa rules and recognition of qualifications. Increased competition from EU firms could challenge domestic service industries.