Prime Ministers Narendra Modi and Keir Starmer signed the India-UK FTA, eliminating tariffs on 99% of Indian exports to the UK, including textiles and apparel. This agreement is expected to increase bilateral trade by Β£25.5 billion and boost the UK economy by Β£4.8 billion by 2040.
Indian apparel exporters, previously facing tariffs up to 12%, will now have a competitive edge in the UK market. This is particularly significant for segments like women’s cotton trousers and shorts, which saw a 30% increase in exports to the UK in 2023.
The FTA also positions India as a preferred sourcing destination for UK retailers seeking to diversify their supply chains away from countries like China and Bangladesh. Indian suppliers, already ranking second for many UK apparel companies, are expected to gain further market share.
Industry experts project that the FTA could lead to a 25-30% growth in Indian apparel exports to the UK, translating to an additional $5 billion in trade. The agreement is also anticipated to attract increased investment in India’s textile sector, enhancing production capacity and efficiency.
While the UK economy is still recovering, with modest retail growth of 0.3% in textiles and clothing as of September 2024, the FTA is expected to stimulate demand for Indian apparel, particularly in home textiles and women’s wear.
In summary, the India-UK FTA is set to open new avenues for Indian apparel exporters, offering tariff-free access to a significant market and encouraging further investment and growth in the sector.
