Eu's foreign direct investment in Indian Textiles Industry- trend, composition and future

The world's two largest democracies, the European Union and India share many pleasant ethics and principles and their relationship is historical, dates back to 1960’s when India was one of the first countries to entrench diplomatic relations with European Economic Community (now European Union). This long-established relationship has changed remarkably over the recent years and so the level of Indo-EU trade; rising from Euro 4.4 billion in 1980 to Euro 79.9 billion in 2011. EU as a bloc of 27 countries is India's largest trading partner. India and EU have improved their trade in both goods and services. Both have signed number of Trade and Investment Agreements. EU's FDI in Indian Textiles Industry has improved in last years particularly after the removal of quotas under Multi-Fibre Agreement.

Keeping in view the trade relations of India and European Union, the present paper examines the trend in EU's FDI in Indian Textiles Industry between the Pre and Post MFA Phase-out period and explores the potential for future. The paper also discusses the challenges faced by EU's investors to invest in Indian textiles industry.