India: EU FTA and 25% Tariff Rollback Review Textile Industry

In January 2026, India signed the EU FTA and secured rollback of the US 25% Russia oil tariff, easing pressure after 6 tough months in 2025.

Late 2025 tariff shocks pushed margins near zero, reduced capacities, and hit an industry supporting nearly half of India’s population.

The 2026 policy reset restored competitiveness but exposed risks of overdependence on one sourcing market.

With EU tariff parity, India can expand in Europe, Australia, and the UK by improving automation, speed, compliance, and traceability.

Future growth depends on shifting from price-led competition to value-led leadership with sustainability and innovation.