Historic India-EU Free Trade Agreement Signed in New Delhi
In a landmark development, India and the European Union (EU) have officially signed a comprehensive free trade agreement (FTA) in New Delhi today. The signing ceremony was attended by Indian Prime Minister Narendra Modi, EU Commission President Ursula von der Leyen, and other dignitaries. This pivotal agreement between the world's second- and fourth-largest economies is set to eliminate approximately $2 billion in tariffs for both sides within the first year, marking a significant milestone after nearly two decades of intermittent negotiations.
Economic and Strategic Implications of the India-EU FTA
The India-EU free trade deal is anticipated to provide a substantial boost to the economies of both regions, which have faced challenges due to recent global uncertainties, including trade tensions. Beyond economic benefits, the agreement also includes provisions to enhance defence partnership, strengthening bilateral ties in strategic areas. Experts highlight that this FTA could serve as a catalyst for economic recovery by fostering increased trade and investment flows.
Key Sectors Expected to Benefit from the Trade Deal
According to stock market analysts, export-oriented companies in India are poised to gain the most from this agreement. The primary sectors identified for potential growth include:
- Textiles
- Pharmaceuticals
- Gems and Jewellery
- Automotive
- Information Technology (IT)
- Defence
These industries are expected to experience improved market access to the EU, leading to stronger export demand, better pricing power, and diversification away from traditional markets like the US and Asia.
Expert Insights on Stock Market Opportunities
Avinash Gorakshkar, a SEBI-registered fundamental stock analyst, commented, "The India-EU free trade deal is expected to boost the sluggish economies of both sides as both economies have been hurt badly due to the recent uncertainties caused by Trump's tariffs. As both sides have accepted that it would help them eliminate nearly $2 billion in tariffs for both sides in one year, the India-EU trade deal is expected to boost exports of both India and the EU, leading to strong quarterly numbers for the Indian companies."
Sugandha Sachdeva, Founder of SS WealthStreet, added, "Our preferred stock picks from this theme are Samvardhana Motherson International, Apex Frozen Foods, Infosys, and Tata Consultancy Services, Cipla, Privi Speciality Chemicals, and PCBL. These companies are well-positioned to capitalise on improved market access to the EU, benefiting from stronger export demand, better pricing power, and diversification away from traditional markets like the US and Asia. Tariff rationalisation could directly translate into higher volumes and improved margins."
Comprehensive List of 42 Stocks Recommended by Experts
Mahesh M Ojha, AVP — Research at KC Securities, emphasized that India's export-oriented companies with greater exposure to EU member countries are likely to benefit the most from this 'Mother of All Deals.' He listed 42 stocks for long-term investment, noting that it may take time for the benefits of the FTA to materialize fully. The recommended stocks include:
- Apex Frozen Foods: 30%
- Avanti Feeds Ltd: 17.2%
- Aequs Ltd: 49.45%
- Aeroflex Industries Ltd: 23%
- Rishabh Instruments Ltd: 68.1%
- AXISCADES Technologies Ltd: 37.0%
- Dynamatic Technologies Ltd: 55.83%
- RACL Geartech Ltd: 58.09%
- Bharat Forge Ltd: 35%
- Tata Motors Ltd: 35 to 40%
- Precision Camshafts Ltd: 23.14%
- Sona BLW Precision Forgings Ltd: 22%
- Samvardhana Motherson International Ltd: 31.0%
- Endurance Technologies Ltd: 23%
- Anthem Biosciences Ltd: 55%
- Acutaas Chemicals Ltd: 38.7%
- Supriya Lifescience Ltd: 41%
- Rain Industries Ltd: 40%
- Hikal Ltd: 28.5%
- Marksans Pharma Ltd: 39%
- Indoco Remedies Ltd: 49%
- Divis Laboratories Ltd: 33%
- Gland Pharma Ltd: 20%
- Emcure Pharmaceuticals Ltd: 20%
- Aurobindo Pharma Ltd: 29.7%
- Solara Active Pharma Sciences Ltd: 20.24%
- Aimtron Electronics Ltd: 23.61%
- Blue Jet Healthcare Ltd: 79%
- M M Forgings Ltd: 21.4%
- PTC Industries Ltd: 54.06%
- K P R Mill Ltd: 24.32%
- PDS Ltd: 71.0%
- Trident: 18 to 20%
- Gokaldas Exports Ltd: 30 to 35%
- Welspun Living Ltd: 20 to 22%
- Vardhman Textiles Ltd: 22 to 25%
- TCS
- HCL Technologies
- Wipro
- Tech Mahindra
- Cipla
- Privi Speciality Chemicals
Important Disclaimer and Investment Advice
This article is intended for educational purposes only. The views and recommendations provided are those of individual analysts or broking companies and do not represent the opinions of Mint. Investors are strongly advised to consult with certified financial experts before making any investment decisions. The long-term nature of these stock recommendations means that benefits from the India-EU FTA may unfold gradually, requiring patience and thorough due diligence.
Key Takeaways from the India-EU Free Trade Agreement
- The India-EU FTA is projected to eliminate $2 billion in tariffs, significantly benefiting export-oriented sectors.
- Market experts have identified 42 specific stocks across various industries for long-term investment based on their potential to leverage improved market access to the EU.
- This deal not only aims to strengthen economic ties but also enhances defence cooperation between India and the European Union.
