What happened:
From January 1, 2026, the EU suspended GSP tariff preferences for most Indian exports, affecting about 87% of shipments—including textiles, plastics, chemicals, metals, machinery, and electrical goods—until 2028. Only around 13% (mainly agriculture and leather) retain benefits. The move comes ahead of a likely announcement on concluding India–EU FTA talks on January 27.
Why it matters to India:
In the near term, Indian exporters face higher tariffs and costs in a key market, potentially impacting competitiveness while the FTA’s implementation is awaited.