Commercial contract with India
The recently signed free trade agreement (FTA) between the European Union and India creates one of the largest free trade areas in the world, significantly facilitating the transfer of goods and services between the two economies. The scale of the agreement has led to public debates about its consequences for the European labor market – including in Poland. Increasingly, concerns are being raised about competition for jobs, wage pressure, and the potential “flood” of workers from India. Could the agreement and the related migration facilitation pose a threat to Polish workers?
The main goal of the agreement is to eliminate customs and regulatory barriers in trade of goods and to widely liberalize the trade of services. The EU has committed to removing tariffs on over 97% of imports from India, while India has agreed to eliminate tariffs on 96.6% of goods exported from the EU. Among the tariffs that will be reduced or eliminated are high duties on machinery, vehicles, aerospace equipment, pharmaceuticals, and chemicals. The tariff on European cars will fall from 110% to 10%, while tariffs on automotive components will be reduced to zero. In parallel, India has agreed to an unprecedented opening of its service market – including financial, telecommunications, maritime transport, and professional services.
The impact of the EU–India agreement will be most visible in industrial and service sectors related to exports and the handling of international projects. The machinery and components sectors, metallurgy, and metal processing will benefit the most, as the reduction of tariffs and growing infrastructure investments in India are expected to lead to stable growth in orders, long-term contracts, and expanded production cooperation. The aviation and space industries will also be strong beneficiaries – Poland’s participation in European supply chains opens the door to involvement in Indian modernization and service programs. The chemical and rubber industries will benefit from increased sales of components for the automotive industry and mass production, which will allow for market diversification. The growing scale of trade exchange will translate into the development of logistics, transportation, and forwarding services, as well as an increased demand for specialized advisory, legal, and tax services.
As a result, the FTA will serve as an impetus not only for the growth of exports but also for the creation of more complex, long-term cooperation ecosystems between companies from the EU and India.
Additional labor market balance
Although the agreement primarily concerns trade, its impact may extend beyond the flow of goods and services, also affecting the labor market and access to talent. The FTA opens new opportunities for Polish industrial and service exporters. The European Commission emphasizes that trade with India already supports about 800,000 jobs in the EU, and the agreement is expected to strengthen this effect. Cheaper access to the Indian market could lead to an increase in orders and employment in the machinery, electromechanical, chemical, pharmaceutical, and food industries. Simplified procedures will also benefit SMEs, for which the costs and complexity of entering the Indian market have been a barrier. More stable trade rules and less bureaucracy may encourage more companies to expand, which in turn will increase the demand for new employees.
– The balance for the labor market is positive. New jobs will be created in sectors such as exports, logistics, business services, legal and tax consultancy, technology, and international projects. Increased mobility of specialists, especially in the IT and engineering sectors, will, on the one hand, influence competition in talent acquisition, but on the other hand, accelerate knowledge transfer. With relatively attractive labor costs, Poland has the chance to become a key hub for handling projects between the EU and India – says Włodzimierz Kucharczuk, Project Manager at Smart Solutions HR.
An industry that may feel relatively negative effects is the textile and apparel industry, particularly in the context of small sewing shops and local producers, for whom the intensification of clothing imports from India could mean tougher price competition.
Migration facilitation – opportunity or threat?
In addition to customs and trade facilitation, the agreement includes the introduction of procedures enabling greater professional mobility for workers from India and the EU. Short-term delegations, intra-corporate transfers, and project-based cooperation will become more accessible, especially in sectors such as IT, engineering, consulting, and professional services. These types of facilitation could lead to more frequent transfers of highly skilled specialists from India to Poland.
– At the same time, it is important to note that easing procedures does not mean fully opening borders or automatic access to the labor markets of EU countries. National visa and work regulations, including Polish regulations on work permits, remain in effect. Nevertheless, the scale of the agreement raises questions about its potential impact on employment in Poland and concerns about a “flood” of workers from India. In our opinion, there is no reason to be concerned – the agreement does not allow for mass economic migration but rather will lead to an intensification of cooperation between workers of both nationalities – emphasizes Kucharczuk.
Data from the report “Foreigners on the Polish Labor Market. How Businesses Assess Cooperation with Foreign Workers,” prepared by Smart Solutions HR, show that nearly 11% of all foreigners employed in Poland are Indians, which means they are already an important part of the Polish labor market. Visa facilitation may slightly increase the number of Indian specialists temporarily working in the EU, mainly in high-tech industries. In practice, however, it is about project-based cooperation and outsourcing of selected processes rather than full employment.
– This situation, in the long term, should have positive effects on the development of the Polish IT industry, which is currently experiencing some stagnation. To maintain competitiveness, it will have to move towards high value-added services – cybersecurity, data analytics, or advanced software development. This, in turn, could create demand for domestic specialists. In the longer term, the FTA therefore presents a challenge for the Polish labor market: a shift towards highly specialized skills, greater added value, and knowledge-based cooperation models, rather than relying solely on labor costs – summarizes the expert.
We encourage you to read the full report titled “Foreigners on the Polish Labor Market 2025. How Business Assesses Cooperation with Foreign Workers.”
The material can be downloaded at this link: https://www.smartsolutions-hr.pl/e-book/
Sources: own work of Smart Solutions HR, https://www.eeas.europa.eu/
