India-UK FTA To Unlock New Growth Avenues For Indian Textile Exports
India and the United Kingdom have concluded a comprehensive Free Trade Agreement (FTA) and a Double Contribution Convention aimed at significantly deepening economic ties, boosting trade and expanding investment and employment opportunities across key sectors, including textiles and apparel. The FTA which took nearly three years of negotiations and 14 rounds of talks to finalize is expected to double bilateral trade to US$ 120 billion by 2030.
One of the biggest beneficiaries of this agreement is India’s textile and garment sector, which has long eyed the UK as a high-potential export market. The UK imports over US$ 21 billion worth of clothing annually, but India’s share has remained modest at around US$ 1.2 billion, just 6% of the UK’s total clothing imports. With tariffs now being removed on nearly all Indian textile and apparel products, industry experts project that India’s share could rise to 15% over the next few years.
Under the agreement, 99% of Indian goods will enter the UK market duty-free, including a wide range of labour-intensive products such as garments, home textiles, leather goods and footwear. Indian exporters of readymade garments, hosiery and value-added cotton products, especially from hubs like Tiruppur, Ludhiana, Panipat and Surat, are expected to benefit immensely from the improved cost competitiveness.
The Ministry of Commerce described the deal as a “modern and comprehensive agreement” that ensures tariff elimination, addresses non-tariff barriers and opens up new avenues for trade in goods and services. According to the ministry, the pact will catalyze growth across labour and technology intensive sectors and support job creation through increased demand and better market access.
India has also secured commitments to ease professional mobility under the FTA. Provisions have been made to facilitate entry for contractual service suppliers, business visitors, investors and independent professionals such as designers, chefs and yoga instructors. Additionally, the Double Contribution Convention ensures that Indian professionals on temporary assignments in the UK will be exempt from making social security contributions for up to three years resulting in significant savings for both workers and employers.
The FTA also addresses India’s push for enhanced access in digitally delivered services. Sectors such as IT, financial services, telecom, architecture and engineering will gain from improved regulatory transparency and reduced barriers in the UK. Given the UK’s advanced digital infrastructure and demand for skilled services, this move is expected to create new opportunities for India’s knowledge economy and service exporters.
The textile industry, which is a cornerstone of India’s export economy and employment generation, has welcomed the agreement. Industry bodies such as AEPC (Apparel Export Promotion Council) and TEXPROCIL (Cotton Textiles Export Promotion Council) have praised the FTA for opening a level playing field against competitors like Bangladesh, Vietnam and Turkey, who already enjoy preferential access to the UK under various trade arrangements.
The deal is expected to complement existing Indian government schemes such as the PLI (Production-Linked Incentive) for textiles and the PM MITRA mega textile parks initiative, further boosting manufacturing capacity, FDI inflow and sustainable practices in the textile value chain.
While the Bilateral Investment Treaty (BIT) is still under discussion and is expected to be finalized in due course, the FTA represents the most ambitious trade pact India has signed to date. For the UK, it marks the most substantial post-Brexit agreement, underlining its intent to forge new global trade relationships.
The legal text of the FTA will now be formalized and presented for approval in the British parliament. Full implementation of the agreement is expected within the next 12 months.
With global trade increasingly disrupted by rising protectionism and tariff wars, especially following the US-led trade barriers, the India-UK agreement signals a renewed commitment to liberalized trade and economic cooperation. The textile sector, in particular, stands poised to make substantial gains, both in terms of export revenue and global market share.
