If a FTA between India and the EU comes about, the EU will gain by 0.14 per cent and India will gain by 1.3 per cent. Due to the differences in size of populations and economies, the per capita increase for India would be 22 dollars as against 44 dollars for the EU. Within the EU, Ireland and Belgium would gain the most in relative terms and Germany the most in absolute terms.

As for sectors which would gain or lose from this FTA, India would gain the most in business services and textiles/apparels. The automotive and mineral sectors would lose. Increased competition in the machinery and equipment sectors would cause losses. The gains accruing to India in business services and textiles outweigh possible losses in the automotive and machinery sectors.

India should take a leap of faith with a region with which it shares economic and political values — more so in a world faced with a US administration in favor of protectionism and a China with hegemonic ambitions.

India has been active in its free trade discussions, concluding deals with many South Asian countries. Regional comprehensive economic partnership talks are gaining momentum. Indian exports, though, have not benefited immediately following its agreements with Asean as well as those with Malaysia or Thailand.