India-UK Apparel, Home Textiles Trade Set To Double Under FTA: ICRA
India’s apparel and home textiles trade with the UK is expected to double over the next five to six years, driven by the recently concluded Free Trade Agreement (FTA) between the two nations, according to credit rating agency ICRA. The FTA is anticipated to come into effect by calendar year 2026, pending legal formalities.
Signed on May 6 after nearly three years of negotiations, the FTA will see India eliminate tariffs on 90% of British goods, 85% of which will become entirely duty-free over a decade. In return, the UK will remove duties on 99% of Indian exports, including textiles. This move is expected to significantly boost bilateral trade, which currently accounts for just 2% of India’s overall trade volume.
India ranks 12th among the UK’s trading partners and is the fifth-largest supplier of apparel and home textiles. In 2024, Indian exports in these categories to the UK stood at $1.4 billion, accounting for 6.6% of UK’s textile imports. With duty-free access, India’s share is projected to increase to 11–12% by 2027, registering a compound annual growth rate (CAGR) of 11%.
At present, Indian apparel and home textiles face an 8–12% duty in the UK. The removal of these tariffs is expected to create a level playing field against countries like Bangladesh, Vietnam, and Pakistan, which already enjoy duty-free access.
In 2024, China led the UK’s imports of apparel and home textiles with a 25% share, followed by Bangladesh (22%), Turkey (8%), and Pakistan (6.8%). The FTA is likely to encourage capacity expansion in India over the next 4–5 years to meet expected demand growth.
