Free Trade Agreements (FTAs) may give India a share in US$ 875 billion imports to Europe, United Kingdom (UK) from China: Boston Consulting Group (BCG)

India’s proposed Free Trade Agreement (FTA) with the European Union could unlock access to a US$ 875 billion market and achieve tariff parity with Association of Southeast Asian Nations (ASEAN) peers, according to Boston Consulting Group (BCG), India-head, Mr. Rahul Jain. Last month, India signed a landmark FTA with the United Kingdom (UK), projected to boost bilateral trade by US$ 34 billion annually and provide tariff-free access to 99% of Indian exports. He said the global trade environment is undergoing structural changes, with geopolitics and economic nationalism becoming as influential as cost efficiency. Preferential market access, punitive tariffs, and supply chain restructuring are redefining trade priorities, offering India a unique opportunity.
He noted that India’s strategic location, strong domestic demand, favourable demographics, and manufacturing push position it to benefit from the “China+1” strategy in sectors like semiconductors, electronics, and rare earth minerals. To seize this opportunity, he stressed the need to secure critical raw materials, build domestic capabilities via global partnerships and localised R&D, expedite FTAs with key markets, and enhance state-level infrastructure readiness. He also cautioned that compliance with the European Union’s Carbon Border Adjustment Mechanism (CBAM) is essential to avoid higher costs for carbon-intensive exports such as steel and aluminium, requiring significant investments in clean technology. Highlighting the Production Linked Incentive (PLI) schemes, which have attracted US$ 20.3 billion since 2020, he said they have generated US$ 191 billion in domestic production and nearly one million jobs. With India producing 20% of global iPhones in FY25 and targeting 32% by FY27, he emphasised that strategic FTAs, sustainability adoption, and capability-building can position India as a competitive global manufacturing and technology hub.

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