New Delhi, March 2 (NationPress) The newly established free trade agreement between India and the European Union has raised alarms in Pakistan, as industry leaders express fears that it may adversely impact the nation's textile industry and jeopardize millions of jobs, according to a report.

Announced on January 27, the India-EU Free Trade Agreement followed extensive negotiations between New Delhi and the European Union.

The agreement is currently undergoing a legal review before it is officially signed, with expectations for it to take effect next year.

Under this deal, India is set to gain extensive tariff-free access to the European market, including textiles and apparel.

This news has sparked significant anxiety in Pakistan, whose economy is heavily reliant on exports to Europe.

Trade statistics indicate that EU member nations import nearly $8.8 billion worth of Pakistani goods annually, constituting about 27 percent of the country’s total exports.

Out of this, approximately $7 billion derives from textiles. In contrast, India exports a smaller portion of its goods to the EU, rendering Pakistan more vulnerable to any shifts in European sourcing strategies, as highlighted by the Assahifa report.

Since 2014, Pakistan has benefitted from substantial trade advantages under the EU’s Generalised Scheme of Preferences Plus (GSP+), which offers duty-free access to various products in exchange for commitments concerning labor rights, human rights, and governance standards.

Currently, Pakistan enjoys duty-free access on around 66 percent of EU tariff lines.

However, once the India-EU FTA is enacted, India is anticipated to obtain tariff-free access across all textile and apparel categories, thereby diminishing Pakistan’s previous price advantage in the European market.

Industry analysts caution that even a minor shift by European buyers towards Indian suppliers could have dire implications for Pakistan.

Projections suggest that a 15 percent reduction in Pakistan’s textile market share in the EU could lead to export losses of around $1.5 billion, according to the report.

Moreover, Pakistan faces internal challenges that may further diminish its competitive edge. Industrial electricity rates in the country are reportedly 25 to 30 percent higher than those in neighboring competitors.

As textiles are the cornerstone of Pakistan’s export economy and are labor-intensive, some industry estimates indicate that up to 10 million jobs could be endangered if the country loses a significant portion of the EU market.