New Delhi [India], May 16 : The India-UK Free Trade Agreement (FTA) is expected to strengthen India's textile exports, improve margins for existing and emerging textile exporters, according to a report by Systematix Research.
The report stated that the Free Trade Agreement (FTA) is set to strengthen the export pipeline, improve margins, and drive scale for India's existing and emerging textile exporters catering to the UK markets.
It said "The FTA is set to strengthen the export pipeline, improve margins, and drive scale for India's existing and emerging textile exporters catering to the UK markets; the full impact would be felt by FY27".
The full impact of this agreement is expected to be felt by FY27, as Indian textile companies gradually gain stronger access and price competitiveness in the UK market.
The report also mentioned that the FTA, which marks a major milestone in the trade relations between India and the UK, was finalized after more than three years of negotiations.
One of the most significant aspects of the agreement is the elimination of the 8-12 per cent import duty that the UK levied on India's textile and apparel (T&A) exports.
This move removes a major trade barrier and puts Indian exporters on an equal footing with countries like Bangladesh, Turkey, Pakistan, Cambodia, and Vietnam, which already enjoy duty-free access to the UK under different trade arrangements.
According to the Systematix Research report, the FTA will not only boost near-term gains but also enhance India's long-term credibility as a trusted trade partner. This could serve as a model for future FTAs with other developed nations.
The report also highlighted that the positive outlook for India's textile sector is based on multiple factors. These include strong demand visibility supported by normalizing inventories at the global retailer level, comparatively lower tariffs by the US on Indian goods compared to other competing nations, and the India-UK FTA.
In addition, rising labour costs in Vietnam and political instability in Bangladesh are shifting global sourcing trends in India's favour.
India's well-established production base and continued government support are also expected to contribute significantly to the long-term growth of the textile industry.
Overall, the India-UK FTA is poised to unlock new opportunities for Indian textile exporters, making them more competitive in one of their key markets and laying the foundation for sustained growth in the sector.
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