EU's suspension of GSP benefits will not have impact on India`s exports to EU: Commerce ministry
The European Union (EU) has suspended export benefits under its Generalised Scheme of Preferences (GSP) to sectors like textiles and plastics, for some countries, including India, effective from January 1, 2025. The commerce ministry has said that this decision will not have any impact on the country's exports to the 27-nation bloc, as from 2016, the EU has progressively suspended GSP tariff preferences for India across products, such as minerals, chemicals and textiles. This was further widened in 2019 and 2023.
The ministry said the same list was extended as per regulations released on December 1, 2025. From January 1, 2026, GSP preferential duties will be suspended for the same list of products until December 31, 2028. As a result of this phased product level graduation, for 2024-25, about 47 per cent of India's exports to the EU, valued at $35.6 billion, are currently outside the scope of the GSP, with only 53 per cent ($40.20 billion) remaining eligible for the benefits.
The development is important as the India and EU are likely to announce the closure of negotiations for a free trade agreement (FTA) on January 27, 2026. According to the Official Journal of the European Union, the European Commission on September 25, 2025, laid down rules for the application of the regulation with regard to the suspension for 2026-2028 of certain tariff preferences granted to certain GSP beneficiary countries - India, Indonesia and Kenya. It shall apply from January 1, 2026 until December 31, 2028.
