Historic Milestone:
India–UK FTA Signed in Presence of PM Modi and Industry Leaders
By Perfect Sourcing Bureau
In a landmark moment for international trade and economic diplomacy, India and the United Kingdom officially signed the long-anticipated Free Trade Agreement (FTA) in the presence of Prime Minister Narendra Modi, UK officials, and top business leaders from both nations. The agreement is poised to open a new era of bilateral cooperation, economic growth, and strategic alignment between the two countries.
Advantages for India
TEXTILE HIGHLIGHTS OF FTA
* Zero-duty market access for the textiles and clothing sector accounts for 1,143 tariff lines (or product categories).
* India is facing a duty disadvantage vis-a-vis Bangladesh, Pakistan and Cambodia, which had duty-free access to the UK market.
* The FTA eliminates the tariff on textile imports from India, thereby enhancing its competitiveness.
* In textiles and clothing, while the UK’s total imports (USD 26.95 billion) are lower than India’s global exports (USD 36.71 billion), India still supplies worth only USD 1.79 billion to the UK.
- Strengthening of India’s position as a reliable alternative to China in fashion sourcing
- Encouragement for sustainable and value-added textile exports
- Potential for British brands to source and co-develop collections with Indian partners.
- Boost: Enhanced protection for investments and smoother entry conditions for both Indian and British firms.
- Sustainability Clause: Inclusion of climate commitments and green trade incentives, fostering eco-friendly commerce.
Speaking at the ceremony, PM Modi emphasized the strategic importance of the agreement:
“This FTA is not just about economic cooperation but a reflection of our deep-rooted partnership with the UK. It will generate employment, strengthen our industries, and reinforce India’s emergence as a global manufacturing hub.” He added that the agreement will benefit MSMEs, farmers, students, and professionals across sectors.
UK representatives praised India’s pragmatic and forward-thinking approach during the negotiations. The UK Secretary of State for Business and Trade noted: “This deal reflects the shared vision of both nations—to create a resilient, rules-based trade ecosystem that benefits businesses and consumers alike.”
Leaders from India’s textile, apparel, and manufacturing sectors hailed the agreement as a “game changer”.
“Sectors poised for exponential growth include RMG (ready-made garments), Home Textiles, Carpets, and Handicrafts, where the removal of duties creates immediate and substantial competitive advantages, India is expected to gain at least 5 per cent additional market share in the UK within 1 to 2 years i.e. about USD 1 to 1.25 bn.”
Sanjay Jain, MD, TT Textiles.
Lalit Thukral, President of Noida Apparel Export Cluster:
“This FTA will give Indian apparel exports a competitive edge in the UK market. Tariff-free access will drive volumes and encourage long-term partnerships with UK retailers.”
Home textile and garment exporters echoed similar sentiments, with many optimistic about increased orders and smoother compliance pathways.
With the India–UK FTA now in place, trade experts anticipate a significant rise in bilateral trade, possibly crossing $100 billion within the next decade. It also paves the way for India to take a more assertive role in shaping global trade dynamics.
The deal is not just a triumph of diplomacy but a powerful signal to the world—India is open, ambitious, and ready to lead.
Reacting on the development. Shri Sudhir Sekhri, Chairman AEPC, said,
“The signing of the landmark India-UK Bilateral Trade Agreement, marks a significant milestone in strengthening the strategic and economic ties between the two nations. This deal will usher a new era of garment trade with the UK. This agreement will enhance market access, spur investment and job creation in the garment sector, besides creating new opportunities for businesses and consumers on both sides.”
“India- UK FTA will not only give competitive market access to the Indian apparel products in the UK market, but also increase the trust and reliability factor by streamlining customs procedures and mutual recognition of standards, thereby, reducing the compliance burdens for the Indian apparel exporters.
The United Kingdom is a global fashion hub and the 5th largest garment importer of the world. The country imported garments worth USD 19.7 billion from the world in the year 2024. India, with its robust apparel sector, has long been a trusted partner for the UK. In 2024, India exported USD 1.2 billion worth of garments emerging as one among top four suppliers to the UK.
For most of the garment products, the duty to export to the UK is 9.6%. India mainly exports cotton-based garments such as t-shirts, ladies dresses, and babywear but lacks competitiveness in winter wear and MMF garments.
