Realizing India’s potential as a future trade partner in the fashion industry, the Paul Alger, Director-International Business, UK Fashion and Textile Association (UKFT) has urged the government to strike a deal that would allow it access the £2trillion Indian market comprising 1.4 billion consumers.
The UKFT believes, such a deal would have a huge impact on the UK fashion and textile industry as India is not only the largest country in the Commonwealth, but also a part of the world with which UK would like to have an FTA. Also, India’s strong links to the UK and its proficiency in English language makes it the most likely beneficiary to the UK.
Protectionism hinders India-UK exports
However, the road ahead might not be easy as India is known for its protectionist attitude towards world trade, warns Drapers Online. The country emphasizes on manufacturing its raw materials rather than importing them. This makes it very difficult for UK brands to export their materials to India.
Also, India’s business culture does not support fashion and textile imports. Several brands have had to either relocate their manufacturing to nearby countries or readjust production according to local demands. A case in point is menswear brand Simon Carter which could build a fantastic business in India only after adjusting to local production standards.
To increase exports of luxury goods to India, UK first needs to reduce its imports from the country. UK imports a lot of fashion and textiles from India which are taxed at 13.8 per cent import tariff rates owing to India’s status as the most favored nation.
Explore opportunities with other trade partners
To reduce tax rates, UK needs to explore more trade opportunities with other emerging economies like Pakistan and Bangladesh who benefit from the preferential tariffs on exports to UK.
Currently, UK companies are cautious about investing in India. A trade deal between the two will encourage more UK companies to do business with India. These companies can explore the Indian embroidery sector to boost its exports.
Experts feel, India-UK deal should focus on protecting British jobs and employment besides enhancing mutual trade between the two countries. It should also support British businesses and encourage them to step up their investments in India.