Tiruppur: The knitwear units of this Tamil Nadu town employ several hundred thousand people stitching garments that arrive in European shops carrying a tariff their competitors in Bangladesh and Vietnam do not pay. That asymmetry is the single most legible thing about the agreement the European Commission sent to the Council on 11 September, and it explains why the Indian side treats a procedural step in Brussels as front-page news.
The Commission’s move was not a negotiation. Talks closed in January 2026 after almost two decades of starting, stopping and starting again, and what went to member states last week were proposals authorising signature and conclusion. The text itself is settled. What is not settled is the route it takes through Europe’s institutions, and that question will decide whether Indian exporters see tariff relief in 2027 or in the decade after.
The Commission split its request into separate proposals for signature and for conclusion, which is the standard architecture but also the place where the interesting argument sits. If the agreement is treated as falling wholly within Union competence, the Council and the European Parliament are the only bodies whose consent is required, and a December signature with early-2027 entry into force is arithmetically plausible. If any member state succeeds in arguing that parts of the package touch national competence, the text becomes a mixed agreement and every national parliament acquires a veto. The EU-Vietnam investment protection agreement, signed in 2019, is still short of full ratification seven years on. That is the cautionary case and everyone in the room knows it.
The commercial content is asymmetric in a way that both sides find useful. Indian exporters gain duty-free treatment across the overwhelming majority of EU tariff lines, with apparel, chemicals and footwear the headline beneficiaries. European exporters gain on a longer timetable and with more carve-outs, because India’s tariff schedule started from a much higher base and its political economy does not permit rapid liberalisation in agriculture or in the automotive sector. A deal that front-loads Indian gains and staggers European ones is not a concession; it is what convergence from unequal starting points looks like on paper.
The harder questions are the ones tariffs do not answer. Rules of origin will determine how much of a garment can be cut and sewn outside India before it loses preference, and for a supply chain that draws yarn and fabric from across Asia the thresholds matter more than the headline rate. The sustainability chapter, and its relationship to Europe’s carbon border adjustment mechanism, remains a live irritant in Delhi, where the levy is read as a unilateral measure grafted onto a bilateral bargain. Neither issue can be reopened now. Both will shape how the agreement performs.
There is also the matter of what the deal signals rather than what it does. Europe has spent three years assembling trade arrangements across Asia with the stated aim of reducing single-supplier exposure, and the Indian agreement is by some distance the largest of them. Whether it delivers diversification depends on Indian manufacturing capacity expanding to absorb the demand, which is an industrial policy question rather than a trade policy one.
For now the file sits with twenty-seven governments and a legal service opinion. The knitting units that would benefit have been told before that the agreement was close. They are entitled to wait for the signature.
