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Key Points

India is poised to double its UK garment market share to 12%, thanks to the newly signed FTA. The deal provides zero-duty access, boosting competitiveness against China and Bangladesh. Rising labor costs in China and sourcing diversification strategies favor India's RMG sector. Government initiatives like PM MITRA and PLI schemes further strengthen India's export potential.

Key Points: India Set to Double UK Garment Exports to 12% Share After FTA

  • India-UK FTA grants 99% zero-duty access for exports
  • RMG sector to gain $1.2B annual trade boost
  • China losing UK market share due to rising costs
  • Bangladesh instability may shift sourcing to India
3 min read

India poised to double ready-made garments market share to 12% in UK in near term: CareEdge

India's RMG exports to the UK may surge to 12% market share, unlocking $1.2B in annual trade, driven by the new FTA and China's declining competitiveness.

"The India-UK FTA is a game changer for India's RMG sector, creating a level-playing field. – CareEdge"

New Delhi, May 11

India is expected to double its market share from 6 per cent in 2024 to 12 per cent in the UK's readymade garments (RMG) imports, translating into an incremental annual export opportunity of around USD 1.1-1.2 billion in the near to medium term, according to CareEdge Ratings.

On May 6, India and the UK successfully concluded an ambitious and mutually beneficial Free Trade Agreement (FTA) that will open up massive export opportunities for many labour-intensive sectors in India. The Commerce Ministry said that 99 per cent of Indian exports will benefit from zero duty.

The ready-made garment (RMG) sector accounted for around USD 525 billion in the global textile and RMG trade in 2024. Major markets include the European Union (EU), the United States of America (USA), the UK, Japan, Canada, and South Korea, which accounted for nearly 44 per cent of global imports.

The UK is among the top five RMG markets, with imports of around USD 20 billion in 2024.

Careedge said India currently exports nearly USD 1.2 billion of RMG to the UK out of its total exports of USD 15-16 billion.

The rating agency said countries such as Bangladesh, Turkey, Cambodia, and Italy enjoy duty-free access to the UK market, while Vietnam and Pakistan benefit from lower to zero tariffs.

"The India-UK FTA is a game changer for India's RMG sector, creating a level-playing field vis-a-vis key competing nations for accessing the nearly USD 20 billion RMG market of the UK, CareEdge said.

According to CareEdge, India now has a clear 12 per cent duty advantage over China, which holds the largest market share in the UK's RMG imports.

"China has lost its market share in the past few years, and it is expected to continue losing its share in the UK's RMG market due to its declining competitiveness, backed by rising labour costs and the 'China Plus One' sourcing strategy adopted by global apparel brands and retailers," said the rating agency.

Additionally, socio-political uncertainties in Bangladesh may also lead apparel brands and retailers with a significant presence in the country to diversify their sourcing, benefiting India.

Recovery in overall RMG demand from the UK, with moderating inflation and interest rates, along with India's increased competitiveness post-duty removal and continued favourable policy regimes in India, such as the PM Mega Integrated Textile Region and Apparel (PM MITRA) park and the Production Linked Incentive (PLI) scheme, is expected to aid the sector in grabbing these additional export opportunities, it added.

- ANI

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Reader Comments

R
Rajesh K.
This is fantastic news for our textile industry! The FTA with UK will create lakhs of jobs in states like Tamil Nadu and Gujarat. We must ensure our manufacturers maintain quality standards to compete with Bangladesh and Vietnam. Make in India getting stronger 💪
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Priya M.
While the opportunity is great, I hope our government ensures fair wages for garment workers. Many factories still pay very low wages despite exporting premium products. Growth should benefit everyone in the supply chain.
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Amit S.
China's loss is our gain! The 'China Plus One' strategy is working in our favor. But we must be careful not to become overdependent on UK market - should diversify to EU and US too. Good to see PM MITRA parks coming up.
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Sunita R.
As someone from Surat's textile hub, I can see first-hand how this FTA is creating buzz. But infrastructure bottlenecks remain - need better ports and faster customs clearance to truly compete with Bangladesh's turnaround times.
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Vikram J.
Hope this leads to more sustainable fashion exports from India. We have traditional khadi, handloom and organic cotton that can fetch premium prices in UK. Time to move beyond just cheap mass production! 🇮🇳✨
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Neha T.
The numbers look promising but let's not celebrate yet. Bangladesh still has cost advantage due to cheaper labor. Our industry needs to focus on efficiency and technology to make the most of this opportunity.

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