India-UK FTA Could Add US$900 Million to Textile Exports: Ind-Ra
India’s textile exports to the UK could grow by nearly US$900 million over the medium to long term following the implementation of the UK-India Free Trade Agreement (FTA), according to a report by India Ratings and Research (Ind-Ra).
India exported textiles and readymade garments worth US$2.2 billion to the UK during FY26. Ind-Ra estimates that if India’s share of the UK textile import market increases from the current 6.9% to around 10%, it could create an additional export opportunity of approximately US$900 million.
The UK remains India’s third-largest textile export market, contributing around 6.1% of the country’s total textile exports.
According to the report, tariff reductions under the FTA are expected to improve the global competitiveness of Indian textile products. However, the actual benefits will depend on how effectively manufacturers expand production capacity, manage costs, comply with regulations, and maintain financial stability.
Ind-Ra believes that large integrated textile companies are better positioned to capitalize on the agreement due to their stronger financial resources, established customer networks, and integrated operations. In contrast, smaller exporters may face financial pressure if expansion plans rely heavily on debt.
The report also suggests that Indian exporters could gradually capture market share from Chinese suppliers in the UK, although Bangladesh is expected to remain a strong competitor because of its lower production costs and large-scale manufacturing capabilities.
Additionally, Ind-Ra emphasized that compliance with environmental regulations, ESG standards, product traceability, ethical sourcing, and quality requirements will play a critical role in determining long-term export success. Companies already aligned with these global standards, including CBAM-related requirements, are expected to gain a competitive advantage under the trade agreement.