India is set to gain duty-free EU access for most textiles and apparel, narrowing the 9–12 percentage-point tariff advantage that has supported Pakistan’s exports under GSP+.
Pakistan’s textile exporters face a material change in European competition after the EU and India concluded FTA negotiations on January 27, 2026. The European Commission formally presented the agreement to the Council for signature on September 11; it is not yet in force and still requires the EU and India to complete their respective approval procedures.
India gains immediate textile access
India secured preferential access across 97% of EU tariff lines, covering 99.5% of its current export value. Importantly for Pakistan, Indian government documentation says tariffs will be eliminated immediately on labour-intensive sectors including textiles and apparel when the agreement enters into force.
That would largely remove Pakistan’s existing tariff edge. PIDE estimates that GSP+ currently gives Pakistani textile and apparel exporters an advantage of roughly 9–12 percentage points over India.
Pakistan remains heavily exposed: the EU says bilateral goods trade reached €12.2 billion in 2025, and around 89% of EU textile and clothing imports from Pakistan currently receive preferential tariff treatment. More than 85% of Pakistan’s overall exports to the EU enter duty- and quota-free under GSP+.
Home textiles and apparel most exposed
Pakistan currently holds around 14% of the EU cotton-products market versus India’s 8.5%, and 10.9% of made-up textile imports versus India’s 5.2%, according to PIDE calculations based on ITC data.
PIDE modelling estimates the FTA could raise India’s total exports to the EU by 21.2–33.6%, although this is a scenario estimate rather than a forecast specifically for textiles.
The competitive issue for Pakistan therefore extends beyond tariffs. India has greater strength in man-made fibres, textile intermediates and a broader export basket, while Pakistani exports remain concentrated in cotton apparel and home textiles.
Pakistan’s GSP+ access remains valuable, but once Indian textile tariffs fall, competitiveness will depend increasingly on energy cost, productivity, lead times, MMF capability, product development, sustainability compliance and supply reliability rather than preferential duties alone.
