The India-UK free trade pact, offering duty-free access and removal of trade barriers, is expected to boost the export competitiveness of India’s labour-intensive textile and apparel sectors. Industry experts estimate the deal could unlock additional export opportunities worth Rs 6,000-7,000 crore and double India’s export market share in the UK to 12% over the next two years.
Textile Industry’s expectations
The leather industry expects to gain at least 5% additional market share in the UK within 1-2 years, outpacing competitors such as Vietnam, Indonesia, Cambodia, Turkey, and Bangladesh, especially in value-conscious retail and brand segments.
The agreement grants zero-duty access to the textile and clothing sector across 1,143 tariff lines, which account for 11.7% of total trade—reflecting the diversity of India’s textile products and their traditional strength in both domestic manufacturing and exports.
“This is long-awaited positive news for the textile and apparel sector,” said Prabhu Dhamodharan, convenor of the Coimbatore-based Indian Texpreneurs Federation (ITF), which represents the textile manufacturing ecosystem, from standalone spinning and weaving units to apparel and home textile exporters.
According to Dhamodharan, UK buyers have already been engaging with Indian exporters, ranging from SMEs to large integrated manufacturers, since the FTA was agreed in May. “Some companies in Tirupur are even expanding capacity to absorb new orders,” he added.
Until now, Indian exports faced an 8% import duty on home textiles and a 12% duty on woven and knitted garments, as well as processed fabrics. This had placed India at a disadvantage compared to competitors like Bangladesh, Pakistan, Cambodia and Turkey, which already enjoyed duty-free access. With zero-duty entry now secured, India is better positioned to narrow the gap with leading players such as China and Bangladesh.
The UK is the world’s fifth-largest garment importer, with imports worth $19.7 billion in 2024. While India is among the top four suppliers, its garment exports to the UK stood at just $1.2 billion, accounting for a 6.1% market share. With duty-free access and the removal of trade barriers, India is poised to strengthen its foothold and challenge China and Bangladesh, which currently account for 21% and 19% of the UK’s apparel imports, respectively.
“This agreement will enhance market access, spur investments and job creation in the garment sector, and create new opportunities for businesses and consumers on both sides,” said Sudhir Sekhri, Chairman, Apparel Export Promotion Council (AEPC).
Keyur Parekh, CEO Global and Whole Time Director, Welspun Living said:“With tariffs of up to 12% on home textile exports now eliminated, Indian manufacturers could gain a cost advantage. Ronak Chiripal, Promoter, Chiripal Group said: “We see this agreement enabling a significant growth in UK-bound exports over the next two years. The agreement also encourages greater product innovation and margin stability in a price-sensitive market.”
FTA
The FTA would not only give Indian apparel products a competitive edge in the UK market but also build trust and reliability by streamlining customs procedures and mutual recognition of standards, thereby reducing compliance burdens for exporters.
Dhamodharan expects India’s share of textile and apparel exports to the UK to double to 11-12% within the next two years. India’s key exports include cotton-based garments such as t-shirts, dresses, and babywear, though it remains less competitive in winter wear and man-made fibre (MMF) apparel. Beneficiaries of the deal include knitwear from Tiruppur, Kanchipuram silk sarees, and Bhagalpur silk from Bihar, among others.
India’s leather exporters are also upbeat, with the 16% tariff on leather goods to the UK now scrapped.
“The trade deal will make exports of labour-intensive goods like leather and footwear far more competitive. The UK is the third-largest trading partner for Indian leather products, and this zero-duty deal will give a strong boost to exports,” said J. Rafiq Ahmed, Chairman, Phoenix Kothari Footwear.
