The India–European Union Free Trade Agreement (FTA) is expected to significantly transform India’s electronics manufacturing and export landscape, with industry estimates projecting exports to nearly $50 billion by 2031. The growth is anticipated across mobile phones, IT hardware, consumer electronics and emerging technology products, up from the current bilateral electronics trade of around $18 billion. With deeper integration into global value chains, exports could potentially exceed $100 billion over the following decade.
The agreement comes at a time when global supply chains are increasingly focused on resilience, diversification and trusted partnerships. By offering preferential access across 99.6% of bilateral electronics trade, the FTA effectively opens the EU’s $744 billion electronics market to Indian manufacturers amid ongoing global realignment.
Industry body ICEA described the pact as a “credible pathway” to accelerate export growth, anchored in expanded manufacturing capacity, job creation, innovation and India’s emergence as a reliable global supplier. According to ICEA, India’s scale, policy stability and growing industrial base strengthen its appeal as a long-term manufacturing partner for European lead firms seeking alternatives to traditional supply centres.
The FTA establishes a structured framework for closer economic integration, encouraging European companies to anchor production and sourcing operations in India. Lower trade barriers and improved regulatory alignment are expected to facilitate deeper collaboration across electronics, semiconductors, semiconductor manufacturing equipment, capital goods and other advanced manufacturing sectors. For Indian companies, participation in EU-led value chains offers access to advanced processes, equipment ecosystems and higher-value manufacturing activities.
Analysts view the FTA as a structural catalyst for the ‘Make in India’ programme, expanding the addressable market for domestic electronics manufacturing and strengthening India’s position within global value chains.
“We anticipate a significant pivot toward high-value exports in consumer electronics, IT hardware, and automotive and industrial electronics, supported by a stronger local component ecosystem,” said Tarun Pathak, Research Director at Counterpoint Research. “By neutralising the tariff advantage of competitors such as Vietnam and China, the agreement strengthens the PLI scheme as an export driver and advances the ‘China+1’ strategy for global supply chain leaders.”
Government officials expect the pact to drive investment-led growth across established electronics hubs including Bengaluru, Pune, Noida, Chennai and Hyderabad. Capacity expansion and fresh capital inflows are anticipated as companies prepare for higher export volumes. A key focus will be scaling production in high-value segments such as semiconductors, laptops and industrial equipment, with industry executives noting that tariff rationalisation and regulatory harmonisation could enhance India’s competitiveness as multinational firms diversify sourcing bases.
Beyond trade, the FTA is also expected to deepen collaboration in design, R&D, component manufacturing and skill development—considered essential for transitioning India from assembly-led output to technology-intensive, higher-value exports.
Electronics has already emerged as one of India’s fastest-growing export categories, supported by production-linked incentive (PLI) schemes and expanding domestic capacity. The India–EU FTA could further amplify this momentum by combining enhanced market access with investment and technology partnerships.
“We will need to go through the fine print in detail. However, I believe it will facilitate trade. I don’t see any negative impact — it should only have a positive effect. That said, we need to examine the specific line items, especially in electronics. Whatever we are currently exporting to Europe should benefit from a positive rub-off,” said JS Gujral, Managing Director, Syrma SGS Technology Limited.
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