Berlin

Indiancompanies need to adopt a more strategic approach to the European market to fully benefit from the free trade agreement, as tariff concessions alone will not lead to higher exports, industry chamber FICCI said on Thursday.

FICCI Secretary General Anant Swarup said the real challenge would be to convert improved market access into sustained market penetration. He said that although the agreement, concluded in January, presents an unprecedented opportunity for Indian MSMEs to expand their presence in the European market, tariff concessions alone will not translate into higher exports.

"Indian companies will need to adopt a more strategic approach to the European market. This includes identifying products where tariff advantages are significant, building relationships with European buyers, upgrading product quality, and integrating into European supply chains," he said.

Swarup is accompanying Commerce and Industry Minister Piyush Goyal, who is on a two-day visit here to boost trade and investment ties between India and Germany, its largest EU trading partner.

He said that MSMEs can also benefit by becoming suppliers to larger Indian and European companies, particularly in sectors such as textiles, leather, engineering components, chemicals and processed foods.

He noted that compliance with European standards will remain one of the most critical determinants of export success. EU requirements relating to product safety, technical standards, sustainability, traceability and carbon emissions can be particularly challenging for smaller enterprises, he said, adding the EU's evolving regulatory framework, including CBAM (carbon border adjustment mechanism) and other sustainability-related requirements, will require Indian businesses to invest in cleaner technologies, certification and compliance systems.