A landmark shift is on the horizon for Indian textile exporters as the proposed India–UK Free Trade Agreement (FTA) is set to eliminate import duties—currently as high as 12%—on textile shipments to the UK. According to a report by India Ratings and Research (Ind-Ra), this move is expected to unlock major growth opportunities for India’s textile sector, especially in apparel and home furnishings.
Why It Matters:
With zero-duty access to the UK market, Indian exporters will gain a competitive edge over rivals like China and Bangladesh, particularly as these countries continue to face trade barriers, including U.S. tariffs.
Key Takeaways :
- Zero Import Duty: Indian textile products will no longer face up to 12% tariffs in the UK, making them more price-competitive.
- Potential Market Gain : India could capture an additional ₹45–70 billion (USD 500–800 million) in exports if it increases its UK market share by just 2–3%.
- Current Export Snapshot :
- India’s total textile exports (FY24): USD 35 billion
- Exports to the UK: USD 1.9 billion (5th largest destination)
- Sectoral Boost:
- Apparel and home textiles are expected to benefit the most.
- Apparel alone accounts for over 70% of China’s and 98% of Bangladesh’s textile exports to the UK, categories India is now poised to compete more effectively.
- Limited Drawbacks : UK imports into India are minimal, so domestic manufacturers are unlikely to be adversely affected.
- Strategic Advantage : India’s improved access comes as global rivals face trade restrictions, enhancing India’s appeal in international sourcing strategies.
What This Means for the Industry:
The FTA could be a game-changer, positioning India not just as a cost-effective supplier but as a reliable, duty-free source for high-quality textiles. It strengthens India’s global trade footprint and supports long-term growth by breaking down critical trade barriers.
