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India-UK FTA: Textiles Set for 10-15% Market Share Surge
19 Jun
Summary
- India-UK FTA offers zero-duty access on 99% of exports.
- UK FTA expected to boost Indian clothing imports by £475 million.
- India aims for 10-15% UK market share in textiles and apparel.
The India-UK Free Trade Agreement (FTA), scheduled to be implemented on July 15, is anticipated to usher in a new era of growth for India's textile and apparel sector. This landmark agreement will grant zero-duty access to 99% of India's exports to the UK, a move that is expected to increase UK imports of Indian clothing by approximately £475 million.
Industry experts predict that the FTA will create a level playing field for Indian exporters, who have previously faced duty disadvantages compared to countries like Bangladesh. This will make Indian products more competitively priced, potentially leading to a surge in demand.
ICICI Securities forecasts that the FTA will enhance India's cost competitiveness due to factors like low labor costs and abundant cotton availability. Large integrated textile players with strong quality standards are expected to be key beneficiaries, with several UK buyers already initiating due diligence for order shifts.
The positive impact of the UK FTA is expected to be visible from FY27 onwards, with potential for India's market share in the UK to rise to 10-15% over time. This, combined with expected stability in West Asia, strengthens the export outlook for Indian textiles.
