Duty-free access, expanded market share, and premium imports set to redefine India’s fashion and home textile trade landscape

The landmark trade deal India-UK Free Trade Agreement (FTA), signed yesterday by Prime Ministers Narendra Modi and Keir Starmer, will reshape India’s fashion and textile narrative on the global stage. The deal is being hailed as a transformative leap for India's textile, apparel, and home furnishing industries. The FTA will eliminate tariffs on 99 per cent of Indian exports and slash duties on 90 per cent of UK goods entering India, the agreement is expected to double India’s apparel and textile exports to the UK by 2030.

What it means for Indian fashion

Under the terms of the agreement—set to take effect by mid-2026—99 per cent of Indian exports will now enter the UK duty-free. For the textile and apparel sectors, this is a major shift. Currently, India’s ready-made garments (RMG), cotton products, and home textiles face tariffs of 8-12 per cent in the UK. These will now be eliminated entirely, improving competitiveness and margins. Conversely, India will gradually reduce tariffs of 10-20 per cent on high-end UK goods, including branded apparel, designer fashion, and premium home textiles, making luxury more accessible to India’s growing affluent class.

A trade windfall in the making

India exported $1.4 billion worth of apparel and home textiles to the UK in 2024. Of this, RMG accounted for $1.1 billion. By 2030, this figure is expected to double to $2.8 billion, as Indian market share in the UK’s import basket surges from 6 per cent to 12 per cent. “This is a Himalayan achievement,” opines A Sakthivel, Chairman of the Apparel Made-Ups & Home Furnishing Sector Skill Council. “India now has the opportunity to become a reliable alternative to Bangladesh and Vietnam in the UK market.” Industry estimates from ICRA suggest an 11-13 per cent CAGR in textile exports to the UK, with annual incremental gains of $1.1–1.2 billion—thanks to the elimination of duties, improved competitiveness, and a stable trade framework.

Cluster impact from Tiruppur to Karur

Export-oriented hubs like Tiruppur, Surat, Ludhiana, Karur, and West Bengal are expected to scale operations significantly. These regions could attract fresh investments as exporters capitalize on improved margins due to tariff elimination and logistics support. Small and medium manufacturers, particularly artisan-led and women-run MSMEs in Tamil Nadu, Gujarat, and West Bengal, will also benefit from simplified trade procedures and improved access to UK buyers.

Rakesh Mehra, Chairman of the Confederation of Indian Textile Industry (CITI), expressed optimism regarding the agreement's potential. "The landmark FTA with the UK is a huge positive for India's textile and apparel domain," Mehra says. "It has the potential to transform the fortunes of the entire Indian textile sector and provide the kind of impetus which is necessary to help India realize its ambitious goal of achieving textile and apparel exports of $100 billion by 2030."

Home textiles get a boost

The home furnishings sector—including bed linen, towels, curtains, and upholstery—stands to gain substantially. Indian home textile brands like Trident and Welspun already have a presence in UK retail. The FTA will expand their scope and margins.

Retail shake-up in India

While exporters cheer, the Indian retail market braces for a wave of premium British imports. High-end British brands such as Paul Smith, Ted Baker, Burberry, and Marks & Spencer (already operating in India) will benefit from lower or zero import duties. Experts believe that affluent Indian consumers—whose numbers are expected to grow by 129 per cent by 2030 will increasingly prefer affordable luxury and quality imports.

Table: FTA impact on India-UK  textile trade

Exporters, stay ready; Retailers, brace for change

The India–UK FTA marks a defining moment for Indian textiles and fashion. It elevates India’s positioning in a high-value, trend-conscious market while opening the domestic arena to global competition.

To win, Indian exporters must double down on branding, innovation, and sustainable practices. For domestic retailers and designers, agility and strategic positioning will be key as the British invasion of premium fashion arrives—tariff-free.

Implications: Adapt or be disrupted

The India–UK FTA is more than a bilateral trade agreement—it's a strategic inflection point. Exporters must now double down on branding, design innovation, and sustainability to capture discerning UK buyers. Retailers and Indian designers must prepare for intense competition in the domestic market and potentially collaborate or co-create with British labels. MSMEs must leverage government incentives and global interest to scale ethically and efficiently. Ultimately, this FTA lays the foundation for India to pivot from a cost-based exporter to a value-based global fashion partner.

A defining decade ahead

As tariffs fall and opportunity rises, the India–UK FTA unlocks not just trade, but transformation. It enables Indian fashion to assert itself globally while inviting healthy competition at home. For a sector often caught between tradition and transformation, this could be the moment where India’s textile legacy meets its fashion-forward future.