The report notes that It is expected to significantly expand the export market in the long term
Stating that Indian textile exports to the United Kingdom (UK) are charged an import duty of up to 12 per cent, which has been brought down to zero under free trade agreement, a report by India Ratings and Research (Ind-Ra) has highlighted that the FTA between these two countries will open up incremental export opportunities for the Indian textile industry.
The report highlighted that this is specifically for the apparel and home textile sectors, which are also likely to be benefitted from the ongoing tariff by the United States (US) on various countries, as India will be taxed at lower rate than its key competing nations as per the current announcement.
“It is expected to significantly expand the export market (potential market of Rs 45 billion to Rs 70 billion assuming a two to three per cent increase in India’s share in UK’s textile imports) in the long term. India’s imports from the UK, on the other hand, are negligible and hence do not pose a threat to domestic firms,” Ind-Ra noted.
India’s total textile exports stood at USD 35 billion in FY24, of which exports to the UK, India’s fifth-largest export destination, accounted for USD 1.9 billion, as per the report, which also highlighted that the UK is a key export market for Indian textiles, but India faces stiff competition from countries which have a larger share of the UK’s import pie.
Ind-Ra added that assuming Chinese exports two to three per cent increase in India’s share in the UK’s textile imports would present a potential USD 500 million to 800 million market for Indian players to tap, which would result in 30 per cent to 45 per cent increase in India’s to the UK.
In particular, Indian apparel, and to some extent home textiles, stand to benefit the most from the FTA, given India competes with China and Bangladesh mostly in these two areas. Apparel, which forms over 70 per cent of China’s textile exports to the UK and 98 per cent for Bangladesh, is expected to provide significant opportunities for Indian players, Ind-Ra remarked.
