India’s apparel and home textiles trade with the United Kingdom is projected to double over the next five to six years, according to a report by credit rating agency ICRA, following the recently concluded India-UK Free Trade Agreement (FTA). The trade deal, signed on May 6, 2024, is expected to become operational by calendar year (CY) 2026, pending legal review.
The agreement is set to significantly enhance bilateral trade, eliminating tariffs on 99% of Indian exports to the UK, including key textile categories. Currently, UK levies 8–12% duties on Indian apparel and home textile products.
“India’s apparel and home textiles trade with the UK is expected to double from current levels in the next 5–6 years,” the ICRA report stated, highlighting the FTA as a game-changer for the sector.
At present, India accounts for 6.6% of the UK’s textile imports, valued at USD 1.4 billion in CY2024, placing it as the fifth-largest exporter to the UK in this segment. The UK’s share in India’s overall textile exports has remained stable at 7–8% in recent years but is expected to rise to 11–12% by CY2027, reflecting an 11% compound annual growth rate (CAGR).
The FTA will also boost India’s competitiveness against other major suppliers such as Bangladesh (22% market share), China (25%), Turkey (8%), and Pakistan (6.8%), many of which already enjoy duty-free access under different trade arrangements.
With the tariff barriers removed, Indian manufacturers are likely to scale up capacity in the next 4–5 years to fulfill growing UK demand.
Despite UK trade currently accounting for just 2% of India’s total trade, the FTA opens significant new avenues for bilateral growth in the textile and garment sectors, aligning with India’s broader export and economic ambitions.
