The FTA is expected to run in the 2026 calendar year (CY) but subject to legal review.
The report added: “India and the UK’s clothing and home textile trade is expected to double from the current level in 5-6 years due to the recently ended FTA between India and the UK.”
After about three years of negotiations, Britain and India entered the FTA on May 6.
Under the agreement, India will reduce tariffs on British goods by 90%, with 85% of them fully exempted for ten years. In return, the UK has agreed to lower tariffs on certain products, causing India to face 99% of its export volume to the UK with zero tariffs.
Currently, India-UK trade accounts for about 2% of India’s total trade, and given the size and potential of both economies, it accounts for underutilized partnerships. Currently, India is the 12th largest trading partner of the UK and is fifth in terms of clothing and home textile imports. The UK imports clothing and home textiles from India out of US$1.4 billion in CY2024, which is a 6.6% share of textiles imported by the UK. Furthermore, the United States and the European Union (EU) remain the main export market for Indian clothing and home textiles, accounting for 61% of CY2024. The UK share has remained stable over the past five years at 7-8% growth, but this is expected to reach 11-12% by CY2027, reflecting a CAGR of 11% between CY2024 and CY2027.
Currently, the UK imposes 8-12% responsibilities on clothing and home textiles imported from India. With tariffs on 99% of Indian goods, including textiles, are cancelled, additional capacity may be added to execute orders in the next 4-5 years.
China is the UK’s largest garment and home textile exporter in the 2024 calendar year with a share of 25%, followed by Bangladesh (22%), Turkey (8% stake) and Pakistan (6.8% stake). After the implementation of the FTA, zero access to clothing and home textiles in India will have a level playing field, such as Bangladesh, Vietnam and Pakistan, compared to the existing state of duty-free access to the country.
