Spices to Rubber: Know how Kerala stands to gain from India‑EU trade pact

Kochi: With India and the European Union (EU) agreeing on a free trade agreement to offset US trade challenges, Kerala is poised to reap significant benefits.

Last fiscal year, India’s exports (excluding IT and petroleum products) amounted to ₹42,343 crore, with about 18% destined for the European Union.

Under the latest agreement, 90% of Indian products will be tariff-free immediately, and within 10 years, 99% of products will not attract tariffs.

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Fisheries

Currently, the EU imposes duties ranging from 4% to 26% on marine products such as shrimp. With the EU deal, tariffs will almost completely disappear, allowing the state to export shrimp and squid directly to Europe at competitive prices, better than Vietnam or Thailand. The agreement will also encourage the production and export of value-added seafood products. There is a large market in Europe for ready-to-eat seafood items.

Coffee, Tea, and Spices

Tariffs on crops such as tea, coffee, black pepper, and cardamom will be fully removed, boosting their exports. Products with Geographical Indications (GI), such as Wayanad Robusta coffee, will receive protection under the agreement, helping to prevent counterfeiting. This will also help Kerala’s unique agricultural products fetch better prices.

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Ayurvedic Products

Traditional Ayurvedic products are included in the agreement. This will allow tariff-free exports of Ayurvedic products to Europe. Ayurvedic treatment centres in Kerala will also find it easier to get approvals in European markets.

Cashew

There is already a significant market for cashew kernels in Europe. With the agreement, Kerala can export high-quality cashews at competitive prices, competing with countries like Vietnam. However, strict quality standards must be maintained.

Also read: European wines to get less expensive under India-EU FTA

Medical devices

Kerala has made progress in medical devices, lab equipment, and dental care products. The agreement will help increase exports in this sector. However, products from Europe will also enter India tariff-free, so competitiveness will be essential.

Textiles

The agreement with the EU will help Kerala face challenges from the US in the textile export sector. High-quality garments can be exported at lower prices, helping capture the European market.

Rubber

Tariffs on rubber-based products such as surgical gloves, tyres, and other industrial products have been fully removed, benefiting rubber-based export units. However, products from rubber plantations planted on deforested land after 2020 cannot be exported to Europe. This will not significantly affect Kerala, though GPS tagging will be required.