India-UK FTA to Double Apparel and Home Textile Trade by 2030: ICRA

India’s trade in apparel and home textiles with the United Kingdom is poised for a remarkable expansion, with volumes expected to double over the next five to six years. This bullish projection comes from a recent report by credit rating agency ICRA, citing the recently concluded Free Trade Agreement (FTA) between the two nations as the key catalyst.

The FTA, finalised on May 6 after three years of intense negotiations, is set to come into force in calendar year (CY) 2026, pending a legal review. Once implemented, it is expected to transform the bilateral trade landscape by significantly easing tariff barriers.

Massive Tariff Reductions to Unlock Growth

Under the landmark agreement, India will reduce tariffs on 90% of British goods, with 85% of them becoming duty-free over the next ten years. In return, the UK will eliminate tariffs on 99% of Indian exports, including the entire spectrum of textiles and apparel.

“This is a watershed moment in India-UK economic ties. The trade is expected to double from current levels within the next 5–6 years, driven by the FTA,” the ICRA report stated, as quoted by news agency ANI.

At present, Indian textile products entering the UK face import duties ranging from 8–12%. The removal of these tariffs will grant Indian exporters parity with competitors like Bangladesh, Vietnam, and Pakistan, which already enjoy preferential trade access under various agreements with the UK.

From Modest Trade to Major Opportunity

Despite the longstanding relationship, the UK currently accounts for just 2% of India’s overall trade—signaling ample room for growth. India, in turn, ranks as the UK’s 12th-largest trading partner, and fifth in terms of apparel and home textile imports.

In CY2024, the UK imported $1.4 billion worth of textiles from India, making up 6.6% of its total textile imports. The US and the European Union remain the dominant destinations for Indian textile exports, collectively accounting for 61% in 2024. However, the UK's share, which currently hovers between 7–8%, is expected to climb to 11–12% by CY2027. This translates to a robust compound annual growth rate (CAGR) of 11% from CY2024 to CY2027.

India Eyes Bigger Share in Competitive UK Market

In the UK’s highly competitive textile market, China currently leads with a 25% share, followed by Bangladesh (22%), Turkey (8%), and Pakistan (6.8%). India’s enhanced access, thanks to the FTA, will not only level the playing field but also spur fresh investments in production capacity to meet growing demand.

Industry experts believe the removal of tariffs will incentivize Indian manufacturers to scale up operations, innovate product lines, and explore deeper integration into UK retail supply chains.

With this strategic agreement, India is well-positioned to not only deepen its economic footprint in the UK but also consolidate its status as a global textile powerhouse.