Indian ready-made garment exports to the United Kingdom are expected to double after the Free Trade Agreement between India and UK are implemented. Currently, the UK levies a 12% duty on ready-made garments made in India. This could potentially become zero after the implementation of the FTA. This is according to a report by Care Edge Ratings. They expect that India’s share could go up as much as 12 percent in the near-term once the FTA comes into effect.
UK’s RMG market size and major exporters
As per available data,, in 2024, the United Kingdom imported ready-made garments worth about $20 billion, says the Care Edge report. With a 25 percent share in total imports, China is the biggest exporter of RMG to the United Kingdom. Bangladesh is the second-largest RMG exporter to the UK with a share of about 20 percent. India ranks 4th after Turkey, which has a 7.9 percent share, among the top RMG exporters to China. Currently, India has a 6 percent share in the total ready-made garment imports of the United Kingdom.
Challenges and opportunities for India
The 12 percent duty in UK has been one of India’s biggest challenges and roadblocks. Meanwhile, its competitors, Bangladesh, Turkey, Vietnam, and Italy, have duty-free access to the United Kingdom’s ready-made garment market.
As a result, the proposed Free Trade Agreement will pave the way for Indian manufacturers to get a level playing field with other global competitors.. It will also give India an advantage over China, which also has to pay duties in the UK.
Akshay Morbiya, Assistant Director at CareEdge Ratings said in a statement,““Recovery in demand for RMG in the UK market, gain in market share after the removal of duties, and a favourable policy regime in India are expected to create an incremental annual export opportunity of around $1.1–1.2 billion in the near to medium term.”
Other sectors stand to benefit from FTA
India and the United Kingdom have bilateral trade of about $60 billion. The CareEdge report estimates that the proposed FTA could bring about 99 percent of product categories to the duty-free trade value. Products like leather, footwear, gems, clothing, jewellery, auto components, and chemicals, which currently face duty ranging between 4 to 6 percent, stand to gain from the FTA.
When will India-UK FTA be implemented?
UK–India Free Trade Agreement (FTA) marks a major leap in bilateral economic ties. As per initial understanding, it eliminates tariffs on 99% of Indian tariff lines and reduces tariffs on 90% of UK lines. The recent discussion between India and the United Kingdom will take about 3 months to be formalised. After that, the documents will be passed by the Indian Cabinet and the UK Parliament. The overall process will take about a year, after which FTA is likely to be implemented.