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Key Points

The India-UK Free Trade Agreement is set to significantly boost bilateral trade in apparel and home textiles, with volumes expected to double by 2030. The deal eliminates tariffs on 99% of Indian exports, leveling the playing field with competitors like Bangladesh and Vietnam. Currently, India holds a 6.6% share of UK textile imports, but this could rise to 11-12% post-FTA. The agreement marks a major step in strengthening economic ties between the two nations.

Key Points: India-UK FTA to Double Apparel and Home Textiles Trade by 2030

  • FTA to eliminate UK tariffs on 99% of Indian goods
  • India currently 12th largest UK trade partner
  • UK imports $1.4B Indian textiles annually
  • China leads UK textile imports with 25% share
3 min read

India-UK apparel, home textiles trade to double in 5-6 years under FTA: ICRA

ICRA predicts India-UK apparel and home textiles trade will double in 5-6 years under the new FTA, boosting exports with zero-duty access.

"India’s apparel and home textiles trade with the UK is expected to double from current levels in 5-6 years due to the FTA. – ICRA Report"

New Delhi, May 18

India's apparel and home textiles trade with the United Kingdom is poised for significant growth, with volumes expected to double over the next five to six years, driven by the recently concluded Free Trade Agreement (FTA) between the two countries, as per a report by credit rating agency ICRA.

The FTA is expected to be operational in calendar year (CY) 2026, subject to legal review.

"India's apparel and home textiles trade with the UK is expected to double from its current levels in the next 5-6 years, owing to the recently concluded FTA between India and the UK," the report added.

The UK and India entered into an FTA on May 6, following approximately three years of negotiations.

Under the agreement, India will reduce tariffs on 90 per cent of British goods, with 85 per cent becoming completely duty-free over a period of ten years. In return, Britain has agreed to lower its tariffs on certain products, resulting in 99 per cent of India's exports to the UK facing zero duties.

Currently, India-UK trade accounts for approximately 2 per cent of India's total trade, underscoring an underutilised partnership given the size and potential of both economies.

India is currently the 12th largest trading partner of the UK and stands in fifth position as far as apparel and home textiles imports are concerned. Apparel and home textiles imported by the UK from India stood at USD 1.4 billion in CY2024, representing a 6.6 per cent share of textiles imported by the UK.

Furthermore, the US and the European Union (EU) continue to be the major export markets for Indian apparel and home textiles exporters, accounting for a 61 per cent share in CY2024. While the UK's share had remained stable at 7-8 per cent over the past five years amidst flattish growth, the same is expected to reach 11-12 per cent by CY2027, reflecting an 11 per cent CAGR between CY2024 and CY2027.

Currently, an 8-12 per cent duty is levied by the UK on apparel and home textiles imported from India. With tariffs being eliminated on 99 per cent of Indian goods, including textiles, incremental capacities are likely to be added in the next 4-5 years to execute orders.

In calendar year 2024, China was the biggest apparel and home textiles exporter to the UK with a 25 per cent share, followed by Bangladesh (22 per cent share), Turkey (8 cent share) and Pakistan (6.8 per cent share). Post-implementation of the FTA, with zero-duty access on apparel and home textiles exported, India would have a level playing field compared to the existing duty-free access nation status like Bangladesh, Vietnam, and Pakistan.

- ANI

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Reader Comments

R
Rajesh K.
This is fantastic news for our textile industry! 🇮🇳 The FTA will help Indian weavers and artisans compete better with Bangladesh and China. Hope the government ensures small manufacturers also benefit, not just big players. More jobs = stronger economy!
P
Priya M.
As someone from Surat's textile hub, I welcome this move but worry about implementation. Last time with EU FTA, small businesses struggled with compliance. Hope MSMEs get proper training on quality standards and documentation requirements.
A
Amit S.
Good step but why does it take until 2026 to implement? By then, Bangladesh might capture more market share. Our bureaucracy moves at snail's pace while competitors sprint ahead. Still, better late than never!
S
Sunita R.
Hope this means more authentic Indian designs in UK stores rather than just cheap copies. Our handlooms and traditional crafts deserve global recognition. Maybe this FTA can help promote 'Vocal for Local' internationally too ✨
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Vikram J.
The 99% duty-free access sounds great on paper, but will UK actually buy more? Their economy isn't doing well either. We should focus equally on domestic market and other Asian partners. Don't put all eggs in one basket!
N
Neha T.
As a fashion designer, I'm excited but concerned about fast fashion pressure. Hope this doesn't lead to exploitation of workers or environmental damage. Sustainable Indian textiles should be our USP, not just low prices. Quality over quantity!

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