The newly concluded India-European Union Free Trade Agreement (FTA) is set to unlock significant business opportunities for Micro, Small, and Medium Enterprises (MSMEs), marking a major transition in the country's economic landscape.

According to Ranjeet Mehta, CEO and Secretary General of PHD Chamber of Commerce and Industry (PHDCCI), the agreement provides Indian industries with a gateway to a massive $23 trillion economy.

The trade pact covers 27 countries within the European Union and is expected to act as a vital buffer for smaller businesses.

Speaking to ANI, Dr Mehta said, "India-EU deal is a pivotal economic milestone. This opens the door for Indian industries to reach around a $23 trillion. The EU consists of around 27 countries. I think that this will open even bigger business opportunities for our MSMEs, especially the MSMEs who have been hit hardest by the US tariffs."

Key labour-intensive sectors are poised to lead the growth under this new framework. The agreement focuses on providing relief and expansion for traditional export categories that have recently faced global trade headwinds.

"Sectors like textiles, apparel, gems and jewellery. These sectors will definitely be benefited by this. And this will also open up doors for employment opportunities in our country," Mehta stated.

He noted that the combined population of India and the EU exceeds 2 billion people, representing approximately 25 per cent of the world economy.

The deal also emphasises deep structural integration between the two regions, particularly in technical fields. Mehta explained that the partnership is "integrating in the global value chain, especially in sectors like logistics and manufacturing."

He further added that the industry expects substantial technological integration and increased investment into the Indian economy, describing the agreement as a "win-win situation for both the EU and India.

"Recent data from the PHDCCI SME index reinforces this optimistic outlook for the manufacturing sector. A survey conducted with industry members and manufacturing units indicates a robust trajectory for domestic production. "I think that this shows the robust growth in manufacturing. Also, the industry has an intention to hire more people in the coming quarters," Mehta told ANI.

Analysis by PHDCCI suggests that demand for goods and services remains strong as the market expands. The industry body anticipates that the positive momentum will continue through the upcoming months, driven largely by the favourable trade environment created by the new pact.

"Based on our analysis, it shows that there is a stronger demand for goods and services. Also, we see stronger growth, with a trajectory, expected in the coming quarters. I think MSMEs are upbeat about the market and especially in the backdrop of the trade deal between India and the EU. All the MSMEs are set to gain through this FTA," Mehta said.

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Published on January 28, 2026