The recently concluded India–European Union Free Trade Agreement (FTA) marks a strategic inflection point in bilateral commerce, unlocking preferential market access for a broad set of Indian industries.
Spanning goods and services, the pact extends across approximately 97% of tariff lines and 99.5% of trade by value, with a majority of tariff concessions taking effect upon ratification.
At a macro level, the deal preserves India’s historic trade surplus with the EU and sets the stage for export growth into one of the world’s largest consumer blocs. The structural provisions extend into services as well, with guaranteed access across 144 service sub-sectors, boosting labour- and skill-intensive segments.
Capital Goods and Engineering sectors are positioned to benefit materially. Historically impeded by tariffs of up to ~22% on exports to EU markets, Indian capital goods producers stand to gain from preferential or zero-duty access. Concurrently, liberalised imports of high-technology intermediate goods from EU partners could reduce input costs and deepen integration in global value chains.
Metals and Mining industries see a clear uplift as well; zero duties across tariff lines break significant cost barriers for Indian steel and mineral exports, enhancing competitiveness in high-value European markets. While EU-specific non-tariff measures such as carbon adjustment mechanisms remain, tariff elimination strengthens long-term predictability for trade partnerships.
In IT and Services, expanded EU access offers an important diversification beyond traditional markets. With the FTA’s structural support, service providers can leverage deeper integration into European demand, particularly in engineering-related and digital services.
Automobiles & Auto OEMs gain staged tariff reductions, though the impact on price sensitivity is mitigated by prevailing demand profiles; removal of export duties opens incremental opportunities into Europe.
Segments such as Pharma and Consumer Durables experience neutral to modest impacts, given limited tariff shifts or entrenched trade patterns, while Defense sees potentially positive effects through reduced costs of select imports and new long-term export horizons.
Smaller, labour-intensive sectors—Textiles, Leather, Agriculture, Chemicals, Gems & Jewellery—stand to benefit from duty elimination and broader market access, reinforcing export-oriented growth dynamics under the FTA framework.
In aggregate, the India-EU FTA reconfigures competitive structures across core industrial clusters, embedding tariff-based advantages and service access that can underpin export expansion and value-chain participation across sectors.
Jindal Stainless TP- 990
Jindal Stainless is structurally well-positioned to benefit from strong domestic stainless steel demand, expanding value-added product offerings, and strategic inorganic growth in CR and downstream capacities. Management’s focus on cost efficiency and VAP expansion strengthens long-term margins and market positioning. 3QFY26 revenue came in at INR105b (-7% vs est.) with EBITDA of INR14b in line and APAT at INR8.6b (+31% YoY, +9% QoQ). Strong volumes (+11% YoY) and muted input costs offset lower ASPs, while EBITDA/t improved 6% YoY to INR21,665. Exports remained weak due to CBAM-related delays. Looking ahead, 4QFY26 earnings are expected to benefit from firmer nickel prices, ASP recovery, and export revival. FY26-28E estimates project revenue CAGR of ~13% and EBITDA CAGR of ~15% (~INR22,000/t), supported by commissioning of SMS Indonesia and downstream expansions, low leverage, and strong cash flow generation.
Bharat Electronics TP- 500
Bharat Electronics continues to reinforce its leadership in India’s defense electronics space, supported by strong execution and a resilient order pipeline. In 2QFY26, the company reported a robust beat across metrics — revenue rose 26% YoY, EBITDA margin improved to 29.4%, and PAT grew 18% YoY — driven by superior cost control and project execution. The order book stood healthy at INR 746b, with inflows more than doubling YoY. Management reaffirmed its long-term export strategy, targeting an increase from 3-4% of turnover to 5% over the next 2-3 years, eventually reaching 10% of total revenues, led by key programs such as QRSAM, Project Kusha, and next-generation corvettes. With expanding system integration capabilities, a strong export order book, and visibility from large defense projects, we estimate steady growth ahead.
(The author is Siddhartha Khemka, Head of Research - Wealth Management, Motilal Oswal Financial Services)
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(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
