Free Trade Agreement with UK Opens New Opportunities for Indian Garments

New Delhi, Jun 24 (KNN) India and the United Kingdom have finalised a landmark Free Trade Agreement (FTA), poised to revolutionize bilateral trade—especially in textiles and apparel.

Negotiations concluded on May 6, 2025, following nearly three years of talks, culminating in a pact that will eliminate tariffs on 99 per cent of Indian exports to the UK and reduce UK tariffs on 90 per cent of its exports to India.

For India’s ready-made garments (RMG) sector, the agreement is truly transformative. Historically, UK import duties of around 8–12 per cent put Indian exporters behind peers like Bangladesh, Turkey, Vietnam, and Cambodia.

The FTA removes these duties, offering India a 12 per cent tariff advantage over China and leveling the playing field with Bangladesh.

With the UK importing roughly USD 20 billion in RMG annually, India—currently holding a 6 per cent share—could potentially double its share to about 12 per cent, adding USD 1.1–1.2 billion annually.

This tariff relief is expected to enhance profit margins, drive scale, and spark investment across the textile ecosystem, particularly in industrial hubs like Ludhiana, Tiruppur, Surat, and Moradabad.

Experts forecast full impact by fiscal year 2027, with India’s exports to the UK expected to nearly double within a few years .

Beyond textiles, the FTA extends across diverse sectors—footwear, gems, marine products, chemicals, and automotive parts—offering duty relief and opening new export avenues.

It also includes a social security agreement benefiting Indian professionals in the UK and vice versa.

Overall, the India‑UK FTA marks a strategic milestone in strengthening economic relations. It is expected to boost bilateral trade by approximately Euro 25.5 billion by 2040, increase market access, support jobs, and foster economic ties between the two nations.

(KNN Bureau)