India-EU Free Trade Agreement to Transform Rajasthan's Export Landscape
The landmark India–European Union Free Trade Agreement (FTA) is poised to create significant opportunities for Rajasthan's traditional export sectors, particularly gems, jewellery and textiles. Exporters based in Jaipur are anticipating a steady increase in European orders as import duties are gradually eliminated under the new trade pact.
Overcoming Tariff Barriers for European Market Access
For years, European markets remained relatively inaccessible for Rajasthan's exporters due to import duties ranging between 2–4%. These tariffs significantly eroded the price competitiveness of handcrafted jewellery and other artisanal products. Meanwhile, the United States market presented even greater challenges with steep 50% tariffs that severely impacted labor-intensive export businesses.
Rajiv Arora, president of the Federation of Rajasthan Exporters, emphasized how the FTA will help counterbalance a concerning 44% decline in shipments to the United States by opening access to the 27-nation European Union market. "Diversification reduces our reliance on the US market and helps us regain lost market share," Arora explained. "The reduced tariffs will finally allow Indian manufacturers to compete on equal footing with rivals who already enjoy preferential access to European markets."
Quantifying Rajasthan's Export Potential
Industry assessments reveal that Rajasthan contributes between $500–800 million annually to India's European Union-bound gem and jewellery exports, with Jaipur accounting for a substantial portion of this trade. In the garment sector, the European Union already absorbs approximately 40% of Rajasthan's total exports, a figure expected to rise substantially under the new agreement.
Rakshit Poddar, president of Garment Exporters of Rajasthan, expressed optimism about the long-awaited development: "After nearly two decades of anticipation, the India–EU FTA has finally become a reality. For Rajasthan's apparel industry, this agreement brings renewed confidence, sustainable growth prospects and significant job creation potential."
Jaipur's Strategic Position in the New Trade Era
Jaipur, which hosts a substantial concentration of Micro, Small and Medium Enterprises (MSMEs) in both readymade garments and gems and jewellery sectors, stands to benefit considerably from the trade agreement. The city's extensive manufacturing ecosystem positions it perfectly to capitalize on the expanded European market access.
Driving Innovation and Sustainability Standards
The FTA is expected to accelerate design innovation and compliance improvements within Rajasthan's readymade garment segment. European buyers are increasingly demanding greater traceability, responsible sourcing practices and low-carbon manufacturing processes. Many production units in Jaipur are already making strategic investments to meet these requirements, including:
- Implementation of solar power systems for cleaner energy
- Development of comprehensive waste recycling programs
- Establishment of certified supply chains meeting international standards
- Adoption of sustainable manufacturing technologies
- Enhanced transparency in production processes
This proactive approach to meeting European standards will not only facilitate market access but also position Rajasthan's exporters as responsible global trade partners. The combination of tariff reductions and improved compliance is expected to create a virtuous cycle of increased orders, higher quality standards and greater competitiveness in international markets.
