3 Stocks Jump Up to 20% After EU Reduces Tariff on Footwear and Leather in ‘Mother of All Deals’

SYNOPSIS: India and the European Union (EU) concluded a landmark FTA, unlocking near-zero tariffs for exports, boosting leather and footwear competitiveness, and triggering sharp gains in related stocks.

India and the European Union (EU) have officially concluded negotiations on a Free Trade Agreement (FTA), marking a major milestone in one of India’s most important strategic economic relationships. The agreement is designed to address today’s global challenges while deepening economic integration between the world’s fourth- and second-largest economies.

Together, India and the EU represent a massive combined market estimated at over Rs. 2,091.6 lakh crore, opening up significant opportunities for trade, investment, and innovation for nearly 200 crore people. The FTA offers unprecedented market access, covering more than 99 percent of India’s exports by trade value, while still preserving policy flexibility for sensitive sectors and safeguarding India’s developmental priorities.

Trade ties between the two regions have already been gaining momentum. Bilateral merchandise trade stood at around Rs. 11.5 lakh crore in FY25, with India exporting ~Rs. 6.4 lakh crore worth of goods to the EU. Services trade between India and the EU also remained robust, reaching Rs. 7.2 lakh crore during the same period.

In broader terms, the agreement elevates India-EU ties from a traditional trade relationship to a modern, multi-dimensional partnership. It promises a stable and predictable environment for exporters, helps Indian businesses, including MSMEs, plan long-term investments, integrate more deeply into European value chains, and secure reliable market access amid ongoing global economic uncertainty.

EU Tariffs on Footwear & Leather sector

Under the India-EU Free Trade Agreement, India has secured preferential access to EU markets across nearly 97 percent of tariff lines, covering an impressive 99.5 percent of trade value. Most notably, about 70.4 percent of tariff lines, accounting for 90.7 percent of India’s exports, will see immediate duty elimination. This is especially meaningful for labour-intensive sectors like textiles, leather and footwear, tea, coffee, spices, sports goods, toys, gems and jewellery, and select marine products.

Several of these labour-intensive sectors, together accounting for exports worth over Rs. 2.87 lakh crore, currently face EU import duties ranging from 4 percent to as high as 26 percent. Once the FTA comes into force, these exports will move to zero duty, significantly improving their price competitiveness in European markets. Beyond boosting exports, this shift is expected to support employment generation and help Indian manufacturers integrate more deeply into European and global value chains.

Further, the agreement also levels the playing field for India’s leather and footwear exports. Tariffs of up to 17 percent will be eliminated immediately, benefiting exports valued at around Rs. 20.9 thousand crore and helping India increase its share in the EU’s nearly Rs. 8.71 lakh crore leather and footwear import market.

Stocks Performance

Below are a few footwear & leather stocks that have witnessed a sharp rise of up to 17 percent during Wednesday’s trading session:

Relaxo Footwears Limited

With a market cap of Rs.  9,458.4 crores, the stock surged by around 4 percent on Wednesday, rising to hit an intraday high at Rs. 382.4 on BSE, as against its previous closing price of Rs. 366.45.

Mirza International Limited

With a market cap of Rs. 540.4 crores, the stock hit a 20 percent upper circuit at Rs. 41.3 on BSE, as against its previous closing price of Rs. 34.42.

Liberty Shoes Limited

With a market cap of Rs. 444.4 crores, the stock hit a 20 percent upper circuit at Rs. 279.7 on BSE, as against its previous closing price of Rs. 233.1.

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