India-UK textile trade: From FTA milestone to market strategy

On the UK side, the agreement reciprocally reduces Indian tariffs on 90 per cent of British exports, covering key sectors such as whisky, automobiles, and machinery. However, textiles stand out as a major win for India, given that apparel is among its top export categories to the UK.

Both governments have hailed the agreement as transformative for the textile sector, as it dismantles long-standing trade barriers and unlocks greater access to the premium UK market for Indian weavers, manufacturers, and exporters. With the FTA now concluded, Indian textile and apparel exports are poised for significant growth, supported by near-complete duty-free access to one of the world’s most lucrative consumer markets.

Bilateral textile & apparel trade trends (2022–2025)

India-UK textile and apparel trade has generally followed a steady growth trajectory, despite brief setbacks. In 2022, India’s textile and apparel exports to the UK reached $1.41 billion, firmly placing the UK among India’s top five export markets (The US, EU, and UK together account for over half of India’s T&A exports). Exports surged in 2022 as global demand rebounded post-pandemic.

In 2023, exports dipped by 8.9 per cent, with apparel shipments falling to $1.2 billion from $1.3 billion in 2022, reflecting weaker UK retail demand amid economic headwinds. However, the UK’s share of India’s total apparel exports rose to 9.2 per cent (up from 8.7 per cent in 2021), indicating India’s stable or improving competitiveness.

By late 2024, trade momentum rebounded. According to Apparel Export Promotion Council (AEPC), India’s garment shipments to the UK rose 9.4 per cent year-on-year during April-October 2024, driven by recovering demand and anticipation of FTA benefits. UK import data showed India supplied £877 million (~$1.1 billion) worth of apparel in the 12 months to Q4 2024 — about 8 per cent of the UK’s total apparel imports.

Below is a summary of recent India-to-UK textile and apparel export figures:

Table 1: India’s Textiles & Apparel (T&A) Exports to the UK – Actual and Projected

Sources: Ministry of Commerce & Industry data (2022–24); projections for 2025–26 assume FTA-driven acceleration.

The export trends

India’s textiles and apparel exports to the UK have exhibited strong and accelerating growth over the past few years—a trend that is projected to continue through at least 2026.

Robust Post-Pandemic Recovery (2022–2023): After stabilising in 2022 with an export value of $1.41 billion, India’s T&A exports surged by 23.4 per cent in 2023, reaching $1.74 billion. This spike reflects a robust recovery from pandemic-era disruptions, combined with renewed demand in the UK as retail markets reopened and consumer spending rebounded.

Sustained Momentum Pre-FTA (2023–2024): Even before the FTA’s implementation, India’s exports grew by 17.8 per cent in 2024, touching $2.05 billion. This sustained momentum suggests that Indian exporters were already gaining traction in the UK due to competitive product offerings, quality improvements, and diversification of supply chains away from over-reliance on China (the ‘China+1’ strategy).

Accelerated Growth Post-FTA (2025 Onwards): The forecasts for 2025 and 2026—~$2.4 billion and ~$2.8 billion respectively—reflect expectations of 15-20 per cent annual growth, fuelled directly by the India–UK FTA.

The elimination of 9.5–10 per cent tariffs is set to dramatically boost India’s competitiveness, enabling:

• Lower prices for UK buyers
• Increased order volumes from UK retailers seeking cost savings
• Greater market share in both basics and value-added apparel

Compounded Benefits Over Time: Beyond immediate price advantages, the FTA is expected to encourage longer-term benefits such as:

• Increased investment in capacity expansion and technology upgrades by Indian exporters
• Strengthened buyer-supplier relationships with UK brands seeking stable, duty-free sourcing
• Enhanced ability to compete against traditional low-cost suppliers like Bangladesh and Cambodia, as well as higher-cost suppliers like Türkiye.

Key takeaway

The trend shows a clear trajectory of accelerating growth, with India poised to double its T&A exports to the UK between 2022 and 2026. The combination of tariff elimination, existing strengths (quality, product variety, raw materials), and rising UK demand positions India for sustained export expansion in the coming years.

UK retailers deepen sourcing from India amid FTA boost

Major UK fashion retailers have long sourced extensively from India—a trend set to accelerate under the India-UK FTA. The removal of import duties enhances India’s appeal as a sourcing hub, thanks to its competitive costs, manufacturing scale, and textile expertise.

Primark counts India among its top sourcing countries, working with 50-170 factories across diverse products, particularly cotton textiles. Its Sustainable Cotton Programme has trained over 150,000 Indian farmers, improving quality and sustainability, with sourcing volumes poised to grow further post-FTA.

ASOS sources a wide range of products from India and, in 2023, partnered with GoodWeave to improve labour conditions in supplier factories. With tariff reductions, ASOS is expected to ramp up sourcing from India to boost competitiveness.

Boden collaborates with about 20 Indian suppliers, focusing on embroidered apparel and leather footwear that align with its design aesthetic. Tariff cuts will enhance Boden’s margins on India-sourced goods.

Other retailers—Marks & Spencer, Next, Burberry, Dunhill, Clarks, JW Anderson, Boohoo, and Missguided—also source extensively from India, seeking to diversify beyond China and Bangladesh. In 2023, India supplied 6.1 per cent of the UK’s T&A imports, positioning it among the UK’s top five suppliers. Analysts expect further sourcing shifts towards India as UK firms leverage FTA benefits.

UK–India Textile Collaborations and Investments Strengthen

While direct UK FDI in Indian textile manufacturing has been limited, collaborations are growing. The FTA’s tariff-free access and policy predictability are spurring interest in joint ventures, technical tie-ups, and supply chain investments.

Examples include:

• Primark’s Sustainable Cotton Programme, training over 275,000 Indian farmers by 2024.
• ASOS–GoodWeave partnership to enhance factory labour conditions.
• Bharat Tex 2025: AEPC’s roadshow in London attracted strong UK brand interest for trade and partnerships.
• Coats Group continues investing in advanced thread manufacturing in India.
• Mothercare–Reliance JV (2023) and ASOS–Reliance partnership (2024) strengthen retail presence and sourcing collaboration in India.

Prospects include joint textile parks, technology upgrades, and sustainability-focused initiatives like textile recycling and circular fashion. Knowledge-sharing alliances between UK fashion institutes and Indian textile bodies are also deepening industry ties.

The strengthened India-UK trade framework sets the stage for increased joint ventures, co-investments, and innovation partnerships in the textile and apparel sector.

India’s policy push to maximise FTA gains in textiles

The Indian government has proactively rolled out a suite of policies to strengthen the textile and apparel sector, with a clear focus on maximising the benefits of trade agreements like the India-UK FTA and attracting foreign investment. These initiatives span production incentives, infrastructure development, export facilitation, and skill-building—all aimed at positioning India as a competitive and reliable sourcing hub for global buyers.

Key policy enablers for India

• Production-Linked Incentive (PLI) Scheme: $1.4 billion in incentives to boost manufacturing of man-made fibre (MMF) apparel, technical textiles, and activewear—categories popular with UK buyers.
• PM MITRA Mega Textile Parks: Seven integrated parks offering world-class infrastructure and plug-and-play facilities, ideal for UK firms seeking production bases.
• Export Incentives:
  • RoSCTL & RoDTEP refund embedded taxes, improving exporter margins.
  • Duty-free cotton imports (from Australia & ELS cotton) lower raw material costs.
• Skill & Innovation Support:
• SAMARTH upskills textile workers.
• NTTM funds R&D in technical textiles and sustainability innovations.
• Trade Promotion: Initiatives like Bharat Tex 2025 and UK roadshows spotlight India’s textile strengths. The Foreign Trade Policy 2023 simplifies export processes.

Strategic outlook

Strategic roadmap

In summary

India’s comprehensive policy push—spanning production incentives, export rebates, infrastructure, and trade promotion—is set to drive higher textile exports to the UK. Both countries are poised to benefit:

• Indian exporters gain seamless access to a high-value UK market.
• UK retailers access diverse, competitively priced, and sustainable products.

With robust government support and growing industry collaboration, India-UK textile trade is expected to scale new heights in the coming years.

Fibre2Fashion News Desk (PN)