'Indian IT firms to gain from greater opportunities in Europe'

Bengaluru: For the tech industry in India, the India-European Union Free Trade Agreement (FTA) will help in better EU market access. Currently, Europe is emerging as a promising destination for Indian IT services firms. From TCS, Infosys to Wipro and HCLTech, IT firms have been expanding their partnerships and winning major deals in Europe. Nasscom said while goods see major tariff cuts, services gains are more about opening markets and rules-based predictability.

"Indian IT firms stand to gain from greater opportunities in Europe, including easier cross-border provision of services and potentially improved mobility for professionals," the industry body said.

The agreement fosters deeper EU-India ties in technology, innovation, and digital areas. This could lead to more EU investment in India's IT ecosystem, JVs, R&D in AI, semiconductors, clean tech, and startups. Indian IT companies could benefit from technology transfer, co-creation, and expanded partnerships, it added.

Rajiv Desai, Global Service Delivery Head, 1Point1 said that in the FTA, technology is not an ancillary add-on; it is central. "This clearly recognises India’s position as a global IT powerhouse and commits both partners to deeper cooperation on digital trade, secure cross-border data flows, digital authentication and e-services," he said.

Tech companies are already operating and delivering services across Europe, and this FTA will unlock new opportunities for Indian tech firms, foster innovation partnerships, and integrate India more fully into Europe’s digital economy, he added.

Big boost for startups

The India-EU FTA will boost startups across various sectors and this also signals long-term commitment and can attract more patient and strategic capital.

The Commerce Ministry said India stands poised to leverage this FTA to create jobs, spur innovation, unlock opportunities across sectors, and enhance its competitiveness on the global stage.

UK-India cross border venture capital firm Pontaq Ventures said the FTA will eliminate or reduce tariffs on 96.6% of traded goods by value, and India will benefit from reduced EU tariffs on 99.5% of its goods over seven years.

Prem Barthasarathy, Founder and Managing Partner of Pontaq, said that as trade barriers reduce and cross-border commercial pathways become more predictable, Indian startups will increasingly be evaluated as global businesses, rather than domestic growth stories.

"This shift is likely to attract greater participation from European VC firms, strategic investors, and corporate venture arms, particularly in sectors aligned with Europe’s strategic priorities such as clean energy, advanced manufacturing, deep tech, and digital infrastructure," he said.

Somdutta Singh, Serial Entrepreneur, Founder and CEO, Assiduus Global said for startups, the India-EU FTA matters even before it is fully in place. "Europe has long been an attractive market, but many founders postpone entry due to cost, complexity, and uncertainty. The prospect of a clearer trade framework already begins to ease some of that hesitation. The most-immediate impact is clarity," Singh said.

Europe is a large and stable market, yet startups often struggle with unpredictable tariffs, regulatory overhead, and long sales cycles. She said clearer trade rules and a more structured framework would make pricing, contracts, and market entry easier to plan. This clarity can pull Europe earlier into a startup’s growth roadmap. "A less-obvious shift is how founders design their businesses from the start. With a more predictable path into the EU, startups have stronger incentives to align products, documentation, data practices, and compliance with European standards early rather than retrofitting later. This shapes early hiring, product architecture, and customer focus, and often leads to Europe becoming a first international market instead of a later expansion," she added.

For product and manufacturing-led startups in consumer goods, hardware, clean tech, and deep tech, improved access to European machinery, components, and specialised equipment could reduce setup costs and raise quality early.

Startups that build early for European standards and expectations are better-positioned to turn interest into durable business as and when the agreement takes effect, the founder of Assiduus Global said.