India's trade relations with the European Union (EU) have been evolving over the years, reflecting the growing economic and strategic importance of both partners. India, as one of the fastest-growing economies in the world, is increasingly becoming a key player in the global trade landscape, and the EU, with its 27 member states, represents one of India's largest trading partners.

Bilateral relations between India and the EU covers a broad spectrum, including goods, services, investments, and technology, with several areas of cooperation holding immense potential for the future.

India-EU trade relations

India and the European Union share a deep and diverse trade relations that spans since decades. The EU, as a bloc, is India's third-largest trading partner, after the United States and China. The bilateral trade relations between India and the EU has grown significantly in recent years, driven by their efforts to diversify economic interactions and strengthen their political and economic ties.

India's trade relations with the EU cover various sectors, ranging from traditional industries such as textiles and garments to high-tech sectors like information technology and pharmaceuticals. The EU is also one of the largest investors in India, making the relations multifaceted, involving not just trade but also strategic partnerships in various sectors.

In the fiscal year 2023-24, India’s bilateral trade in goods with the European Union (EU) reached an impressive USD 137 billion, with exports to the EU amounting to USD 76 billion and imports from the EU standing at USD 59 billion. This solid performance has positioned the EU as India’s largest trading partner in goods, surpassing other major partners like the United States and China, whose trade figures were USD 120 billion and USD 118 billion, respectively, for the same period.

Over the past five years, India’s trade with the EU has experienced remarkable growth. The total value of goods traded has surged from USD 90 billion in FY 2019-20 to USD 137 billion in FY 2023-24, representing an impressive growth rate of over 50%. This growth has been fueled by increasing demand for Indian products such as pharmaceuticals, textiles, and machinery in European markets, along with rising imports of advanced technologies and capital goods from the EU. Notably, India has maintained a trade surplus with the EU, amounting to USD 15 billion in 2023-24, underscoring the strengthening of economic ties between the two regions. The robust trade relationship is expected to continue growing, driven by ongoing efforts to enhance bilateral cooperation and market access.

India and European Union merchandise trade trajectory (Value in USD billion)