India-EU FTA opens new opportunities for tea exports: Trade association

Welcoming the conclusion of the India-EU Free Trade Agreement (FTA), Tea Association of India (TAI) president Shailja Mehta on Wednesday outlined the opportunities and challenges the pact presents for the Indian tea industry.

Mehta said India currently exports around 19-21 million kilograms of tea annually to European Union countries, with Germany and Poland emerging as key entry points and redistribution hubs for Indian tea in the European market.

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“The agreement is expected to enhance India’s competitiveness in global markets, particularly in agriculture, processed foods and tea,” she said. While duty rates on black tea and most green tea categories were already nil, the FTA is expected to remove duties on green tea imports of less than three kg, further strengthening India’s export potential.

However, Mehta cautioned that stringent EU regulations relating to Maximum Residue Limits (MRLs), food safety, traceability, packaging and labelling remain major challenges. She said the industry is looking for provisions in the FTA that ensure regulatory transparency, science-based standards and timely consultations before the introduction of new measures.

Under the agreement, goods exported to the EU must meet rules of origin requirements through adequate processing or manufacturing to qualify for preferential access. “The product-specific rules are balanced and aligned with existing supply chains, ensuring substantial processing within the partner countries while allowing flexibility to source inputs globally,” she explained.

Mehta said the FTA holds significant promise for expanding India’s presence in the EU market, provided adequate domestic support is extended. “To fully leverage the agreement, exporters ~ especially small and medium enterprises ~ will need assistance in certification, testing, traceability systems and capacity building,” she noted, adding that emerging EU regulations on sustainability, environmental compliance and human rights due diligence could increase compliance costs.

She stressed that early stakeholder consultations and alignment of domestic schemes with FTA commitments would be crucial to ensure Indian tea producers are prepared to benefit from the agreement.

TAI’s views come after India and the European Union formally concluded negotiations on the comprehensive FTA ~ officially titled the India-EU Trade and Investment Agreement ~ during the 16th India-EU Summit held in New Delhi.

The agreement aims to deepen bilateral trade and investment by reducing tariffs, addressing non-tariff barriers and enhancing regulatory cooperation. With a combined market value of over Rs 2,091.6 lakh crore (USD 24 trillion) and a consumer base of nearly two billion people, the FTA is expected to provide market access for over 99 per cent of India’s exports by trade value, while safeguarding sensitive sectors and supporting India’s developmental priorities.