Only 2.66% of India’s exports to the EU are affected by the withdrawal of GSP benefits, the commerce ministry said.
Earlier reports claiming 87% of exports were hit are misleading, as most trade was never GSP-eligible.
The clarification comes ahead of a potential India–EU free trade agreement announcement later this month.
India Says EU GSP Impact Much Smaller Than Reported, Only 2.66% of Exports Hit
Commerce ministry counters reports of a major export shock, says GSP withdrawal impacts a small share of India’s EU-bound trade
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Only 2.66% of Indian exports to Europe have been impacted by the European Union’s withdrawal of benefits under the Generalised System of Preferences (GSP), the Ministry of Commerce and Industry clarified on Friday, countering earlier reports that nearly 87% of Indian exports were affected.
The withdrawal of GSP benefits came into effect from January 1. The EU’s GSP is a unilateral trade preference scheme under which the bloc offers reduced or zero customs duties on exports from developing and least-developed countries.
“In 2023, EU imports from India amounted to approximately €62.2 billion. Of this, only €12.9 billion was eligible under the EU’s Standard GSP framework,” the ministry said in a statement. “India has graduated from 12 major product categories. As per the new regulation, €1.66 billion of trade is expected to graduate out of the GSP regime, leaving eligible GSP trade at €11.24 billion, based on 2023 data. In other words, the new regulation impacts only 2.66% of India’s exports to the EU.”
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Bilateral trade between India and the EU totalled $140 billion in 2024, making the bloc India’s largest trading partner.
The EU has withdrawn GSP benefits across several major industrial sectors, including minerals, chemicals, plastics and rubber, stone and ceramics, precious metals, iron and steel, electrical goods, and transport equipment — sectors that form the backbone of India’s exports to Europe, according to a report by the Global Trade and Research Initiative (GTRI).
The report also cautioned that India’s textile sector is at a particularly vulnerable juncture due to its price sensitivity and could face increased competitive pressure from duty-free exporters such as Bangladesh and Vietnam.
Meanwhile, the much-anticipated India–EU Free Trade Agreement (FTA) is expected to be announced by the end of January. European Commission President Ursula von der Leyen and European Council President Antonio Costa are scheduled to visit New Delhi from January 25–27.
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Union Commerce Minister Piyush Goyal has described the India–EU trade pact as the “mother of all deals.” Speaking at the annual World Economic Forum summit in Davos, von der Leyen said Brussels and New Delhi are on the “cusp of a historic trade agreement.”