Indian textile and apparel companies are stepping up expansion plans in Europe and the UK as upcoming free trade agreements (FTAs) are expected to improve India’s competitiveness against rival sourcing hubs such as Bangladesh and Vietnam.
According to a report by The Times of India, companies including Gokaldas Exports, KPR Mill, Arvind, Welspun Living, Vardhman Textiles and Pearl Global Industries are seeing stronger export opportunities in these markets and are increasing efforts to build their presence locally.
Some companies are setting up showrooms, appointing executives in Europe and participating more aggressively in trade fairs to improve brand visibility and deepen customer relationships.
The textile sector, which was among the worst affected by tariff-related disruptions in the US market last year, is now looking to diversify geographically and reduce dependence on a single export destination.
“European and UK buyers are proactively diversifying sourcing away from Bangladesh and Vietnam, and tariff parity from FTAs will support India’s push,” Pallab Banerjee told TOI.
“The EU and UK buyers are already placing trial orders and building vendor bases in India in anticipation of implementation of the FTA,” he added.
According to TOI, industry estimates suggest India’s textile exports to the EU and UK, which stood at $9.76 billion in FY25, could rise to nearly $15 billion once the trade agreements are fully operational.
Jitin Makkar said gains from the FTAs may begin reflecting meaningfully from FY28 onward.
“Given ongoing tariff-related uncertainty, corporate India will adopt geographical diversification as a key risk mitigation strategy in the long term,” Makkar told TOI.
“Exporters would look to strengthen their efforts to build a more geographically diversified customer footprint, even if it involves parting with some margins in the near term. This can attract long-term investments in the sector,” he said.
However, companies have flagged capacity constraints as a major challenge. While some firms are expanding manufacturing capacity domestically, others are exploring asset-light models through partner factories in countries such as Sri Lanka, Bangladesh and Egypt.
The push comes as India accelerates negotiations on trade agreements with the UK and the European Union. The proposed India-UK FTA is expected to significantly lower tariffs on textile and apparel exports, helping Indian manufacturers compete more effectively against countries that already enjoy preferential market access.
(With TOI inputs)
