India-UK Trade Deal Boosts Indian Textile Companies

The recent Free Trade Agreement (FTA) between India and the United Kingdom has brought a wave of optimism to India’s textile industry. On Wednesday, May 7, shares of major textile exporters—Gokaldas Exports Ltd., Arvind Ltd., and KPR Mill Ltd —rose up to 9%. This comes after the successful conclusion of the FTA talks, which are expected to boost Indian exports, especially textiles and garments.

Tariff Elimination Brings Big Advantage

A key benefit of the FTA is the removal of the 8–12% UK import duty on Indian textiles and garments. This makes Indian products more competitive against exports from Bangladesh, Vietnam, and China. Indian apparel exporters will now enjoy tariff parity with Bangladesh and a 12% advantage over China.

This move is seen as a major win for Indian companies like Gokaldas Exports, which rely heavily on exports. Currently, the UK contributes about 5% to Gokaldas’ revenue, but the company believes this figure could double with the FTA in place. He estimates a US$1 billion growth opportunity for Indian apparel in the UK market.

Market Share and Revenue Potential

India’s apparel exports to the UK are currently valued at US$1.5 billion, compared to Bangladesh’s US$4 billion and China’s US$5 billion. The UK imported US$556 million in knitted apparel, US$263 million in made-up textile articles, and US$24 million in textile fibres from India in 2024. The new FTA is expected to help India close the gap with its competitors by 2027.

Gokaldas Exports earns most of its revenue from the Americas (81%), followed by Asia (13%) and Europe (6%). The deal may lead to better diversification and increased presence in the European market.

Social Security Relief for Workers

Another key feature of the FTA is the “double contribution convention.” This clause ensures that workers moving between India and the UK do not have to pay social security contributions in both countries. It is expected to benefit Indian professionals and workers in the UK by simplifying payments for pensions and welfare.

Conclusion

The India-UK FTA is a significant step for boosting India’s textile exports. It not only benefits companies like Gokaldas and Arvind but also supports Indian workers abroad. As trade grows, this deal may reshape India’s global export strategy.

Read more on: How Different Sectors are Likely to Impact After India–UK Free Trade Agreement?

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