India-UK FTA to boost textile exports, margins for domestic exporters: Report

The recently concluded India-UK Free Trade Agreement (FTA) is set to provide a major boost to India’s textile exports and enhance profit margins for both established and emerging Indian exporters catering to the UK market, according to a report by Systematix Research.The report highlights that the FTA, finalized after over three years of negotiations, represents a major milestone in the trade relations between India and the United Kingdom. A key component of the agreement is the elimination of the 8–12 per cent import duty previously levied by the UK on Indian textile and apparel (T&A) exports, according to news agency ANI .This tariff removal eliminates a long-standing trade barrier and places Indian exporters on a level playing field with competitors from Bangladesh, Turkey, Pakistan, Cambodia, and Vietnam—countries that already enjoy duty-free access to the UK under existing trade arrangements.According to Systematix Research, “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 report further notes that the agreement will not only generate near-term benefits but also enhance India’s long-term reputation as a reliable trade partner. It is expected to serve as a blueprint for future trade agreements with other developed economies.A positive outlook for India’s textile industry is also being driven by other supportive factors, including a rebound in global retail demand amid inventory normalization, comparatively lower U.S. tariffs on Indian goods, and favourable shifts in global sourcing due to rising labour costs in Vietnam and political instability in Bangladesh.India’s robust manufacturing base and sustained government support are expected to further underpin the sector’s long-term growth trajectory.The India-UK FTA is projected to open new avenues for Indian textile exporters, enhance their competitiveness in a key international market, and support sustained expansion in the industry.