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India's FTA with UK offers big opportunity for Indian textile exporters amid US tariffs
Aug-13-2025

Commerce ministry has said that India's free trade pact with the UK will help boost shipments of garments, home textiles, carpets and handicrafts, with textile exports projected to rise 30-45 per cent by 2030. It said domestic exporters should leverage the trade agreement to significantly tap opportunities in Britain, which imports $27 billion worth of textiles annually, especially amid high US tariffs on the sector.

It said India had duty disadvantage compared to major competitors. With comprehensive economic and trade agreement (CETA), India's textile exports enter the UK duty-free immediately upon entry into force. This will especially benefit sectors like ready-made garments, home textiles, carpets, and handicrafts, creating strong opportunities to boost exports. It noted that this move removes previous tariff disadvantages and provides a competitive edge to Indian exporters vis-a-vis regional rivals like Bangladesh and China. It has the potential to double India's share of UK imports from 6 per cent to about 12 per cent (about $1.1-1.2 billion extra annually). In volume terms, the pact could boost textiles exports to the UK by 30-45 per cent by 2030, translating into an additional $500 million-$800 million in export value. 

The India-UK CETA was signed on July 24 in London. The UK is India's third-largest export destination, accounting for 5.80 per cent of textile exports in 2024. India's total export to the world is $37 billion. The country is the fourth-largest textile supplier to the UK, with a 6.6 per cent market share ($1.79 billion), behind China (25.4 per cent), Bangladesh (19.9 per cent), and Turkiye (7.9 per cent). The US has imposed 25 per cent tariffs on Indian goods, including textiles, from August 7. An additional 25 per cent will come into force from August 27, taking the import duty on Indian goods to 50 per cent.  


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