The Impact of the India–European Union Free Trade Agreement on the Competitiveness of Asian Export Businesses

Abstract

This article aims to analyze the impact of the India–European Union Free Trade Agreement (India–EU FTA) on the export competitiveness of businesses in Asia within the context of the changing global trade structure and the expansion of regional free trade agreements. The study adopts a qualitative research approach using documentary research, drawing upon reports from international organizations, academic literature, and international trade data. The data are analyzed through content analysis and comparative analysis. The findings indicate that the India–EU FTA has the potential to significantly reshape trade patterns and competitive dynamics in the European market, as both India and the European Union are major economic actors in the global trading system. The reduction of tariffs, liberalization of services, and regulatory provisions within the agreement are expected to influence the competitiveness of export-oriented businesses in Asia. On the one hand, the agreement may create new opportunities for expanding trade, increasing investment flows, and strengthening global supply chain linkages. On the other hand, it may intensify competition in the European market, particularly in industries with similar export structures such as textiles, garments, and certain manufacturing sectors. This development may pose challenges for several Asian economies that rely heavily on exports to the European market, including Bangladesh, Vietnam, and Thailand. Furthermore, the agreement may lead to structural adjustments in global supply chains and shifts in investment patterns within Asia, potentially strengthening India’s role as a production and export hub connected to the European market. Therefore, Asian countries need to adapt to these changes by enhancing export competitiveness, upgrading product standards, promoting technological innovation, and expanding international trade cooperation in order to maintain their competitiveness in the global market in the long term.