India

India is a beneficiary of the Standard GSP. With a per capita income of $2,481 in 2023, the World Bank classifies India as a lower middle-income country. Total EU imports from India amounted to about €65 billion in 2023, the highest by far among all GSP countries. Preferential GSP imports stood at €10.2 billion in 2023, making it the largest beneficiary among the Standard GSP countries.

What is the GSP?

The Standard GSP targets developing countries that are classified by the World Bank as lower or lower-middle income countries and which do not have equal preferential access to the EU market through any other arrangement. Standard GSP beneficiary countries can benefit from duty suspension for non-sensitive products as well as duty reductions for sensitive products across approximately 66% of all EU tariff lines.

At a glance: EU preferential imports from Standard GSP beneficiary countries (2023, € million)

group

1.4B (2023)

Population

account_balance

Federal Parliamentary Republic

Government

trending_up

8.2% (2023)

GDP Growth

equalizer

5.6% (2023)

Inflation

money

$ 3,567.6B (2023)

GDP

Facts about India's economy

Strong Economy

India is the world's fifth largest economy with a GDP of almost $3.6 trillion (2023). The agrarian origins of India's economy persist in today's economic structure. India is the world's largest producer of a number of agricultural products, including milk, jute and pulses and takes a leading position in the production of rice, wheat, sugarcane, fruit, and cotton.

Export Products

India's most important export goods are medium and light oils, diamonds and articles of jewellery, machinery, appliances, and vehicles as well as pharmaceuticals and biochemicals.

Trade Partners

The EU, the US, and China are India's most important trading partners, each accounting for between 10% and 12% of India's total trade. Most of India's imports originate in China (15% in 2023), while the US and the EU are the most important destinations for Indian products, with shares of 17.6% and 17.5% in 2023, respectively.

Economic Structure

About half of India's GDP is accounted for by the services sector (49.6%), more particularly telecommunications, IT, and software. Nonetheless, the majority of the Indian population (43%) still works in the agricultural sector, which contributes about 16% to GDP.

Usage of GSP Preferences

India currently makes considerable use of GSP trade preferences and exports about 79% of eligible products at preferential rates to the EU market. As a number of sectors have already graduated out of the GSP, only about 21% of total EU imports from India were eligible for preferences in 2023.

Trade with the EU

Total trade with the EU amounted to almost €124 billion in 2023, 12.2% of India's total trade. €55 billion are imports from the EU, putting the EU in third place as a supplier (behind China and Russia), and €69 billion worth of goods were exported to the EU, making the EU the second most important export market, after the US.

India and the EU

Imports from India by product section (2023, € million)

Imports from India over time (€ million)

INDIA AND THE EU GSP

Economic Impact

21%

Share of India's exports to the EU in 2023 that were eligible for reduced tariffs granted by the Standard GSP.

79%

India's preference utilisation rate in 2023.

54%

Share of zero-duty imports from India.

Preference utilisation and export diversification

EU imports from India (€ million)

Preference utilisation (%) vs. total eligible imports (in € million)

India’s preference utilisation rate was comparatively stable between 2013 and 2023, despite changes in the composition of eligible product groups. This can be attributed to the suspension of GSP preferences for certain product sections for 3-year periods. Thus, the value of preference-eligible products dropped from €22 bn in 2022 to €13 bn in 2023 as a result of the graduation of four product sections (for one section, vehicles, aircraft and ships, the preferences were reinstated), and the preference utilisation rate fell from 88% to 79%.

The largest product sections under the GSP (€ million, 2023)

The majority of products imported from India under GSP preferences make considerable use of the reduced duties. Further potential remains, however, for increasing GSP utilisation in headgear and transport equipment exports as well as in exports of chemical products, including pharmaceuticals, fertilisers and essential oils. Overall, this graph indicates that imports from India under the GSP are relatively well-diversified and India belongs to the GSP countries that trade the largest number of tariff lines.

SUSTAINABLE DEVELOPMENT

India maintains a high level of ratification, despite the preferential market access granted by the Standard GSP is not bound to the ratification of international conventions. India has ratified 12 out of 15 core international conventions on human rights and labour standards. The country is also a signatory to the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment. In addition, India has ratified 8 international conventions on environmental protection and 4 conventions on good governance.

Core international conventions on human rights and labour standards

Ratified

Convention on the Prevention and Punishment of the Crime of Genocide (1948)
International Convention on the Elimination of All Forms of Racial Discrimination (1969)
International Covenant on Civil and Political Rights (1976)
International Covenant on Economic Social and Cultural Rights (1976)
Convention on the Elimination of All Forms of Discrimination Against Women (1981)
Convention Against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment (1987)
Convention on the Rights of the Child (1990)
Convention concerning Forced or Compulsory Labour, No 29 (1930)
Convention concerning Equal Remuneration of Men and Women Workers for Work of Equal Value, No 100 (1951)
Convention concerning the Abolition of Forced Labour, No 105 (1957)
Convention concerning Discrimination in Respect of Employment and Occupation, No 111 (1958)
Convention concerning Minimum Age for Admission to Employment, No 138 (1973)
Convention concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour, No 182 (1999)

Not Ratified

Convention concerning Freedom of Association and Protection of the Right to Organise, No 87 (1948)
Convention concerning the Application of the Principles of the Right to Organise and to Bargain Collectively, No 98 (1949)

Additional Conventions

Convention on International Trade in Endangered Species of Wild Fauna and Flora (1973)
Montreal Protocol on Substances that Deplete the Ozone Layer (1987)
Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal (1989)
Convention on Biological Diversity (1992)
The United Nations Framework Convention on Climate Change (1992)
Cartagena Protocol on Biosafety (2000)
Stockholm Convention on persistent Organic Pollutants (2001)
Kyoto Protocol to the United Nations Framework Convention on Climate Change (1998)
United Nations Single Convention on Narcotic Drugs (1961)
United Nations Convention on Psychotropic Substances (1971)
United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988)
United Nations Convention against Corruption (2004)

EU-India Bilateral Development Cooperation

DG INTPA

Access all info about EU-India relations on the International Partnerships website.