Our Bureau
New Delhi
India’s ready-made garment (RMG) exports to the United Kingdom are poised for a dramatic surge, potentially doubling in value, following the implementation of the India-UK Free Trade Agreement (FTA), according to a recent report by CareEdge Ratings. The much-anticipated FTA is expected to eliminate the current 12% duty on Indian garments, providing Indian exporters with a level playing field against competitors like Bangladesh, Turkey, and Vietnam, who already enjoy duty-free access to the UK market.
Currently, India holds a 6% share of the UK’s $20 billion RMG import market, ranking fourth behind China, Bangladesh, and Turkey. China leads with a 25% share, while Bangladesh follows at 20%. The removal of import duties is projected to boost India’s share to as much as 12% in the near term, the report states.
Akshay Morbiya, Assistant Director at CareEdge Ratings, noted, “Recovery in demand for RMG in the UK market, gain in market share after the removal of duties, and a favourable policy regime in India are expected to create an incremental annual export opportunity of around $1.1–1.2 billion in the near to medium term.”
The FTA is not only expected to benefit the garment sector but also other Indian industries such as leather, footwear, gems, jewellery, auto components, and chemicals. These sectors, which currently face duties ranging from 4% to 6%, could also see their products become more competitive in the UK market.
India and the UK currently enjoy bilateral trade worth approximately $60 billion. The FTA is projected to bring 99% of product categories under duty-free trade, marking a significant milestone in economic relations between the two countries.
The agreement is expected to be formalised within the next three months, followed by ratification by the Indian Cabinet and UK Parliament. Implementation is anticipated within a year, setting the stage for a new era in India-UK trade and a major boost for Indian exporters.
