The $179-billion textiles & apparel industry is set to benefit from the India-UK Comprehensive Economic and Trade Agreement (CETA) that comes into force from July 15. By granting zero duty access to nearly 99% of Indian exports entering the UK market, the pact will open new opportunities for an industry which is the second largest employment generator in India.
The textiles & apparel industry contributes 2% to the country’s gross domestic product (GDP), 11% of manufacturing gross value added (GVA), and 8.63% of total exports, which highlights its critical role in shaping India’s economic architecture.
Experts say the India-UK CETA is a significant milestone for the Indian textile and apparel industry and is expected to improve the country’s price competitiveness, enhance export opportunities, and strengthen our position in one of the world’s key fashion and retail markets. It also makes India closer to its target of achieving $100 billion in textile exports by 2030.
Kumar Duraiswamy, Joint Secretary, Tiruppur Exporters’ Association (TEA), says that the India-UK CETA has boosted the sentiments for exporters and buyers. “The UK is one of the key markets for India, and the buyers were elated when the pact was signed. It will be a good opportunity for India, and we will scale our turnover with the UK in the coming years. All the buyers are making themselves prepared to keep the business in momentum and to get more orders,” he says.
With the level playing field now in place, Duraiswamy says India will be more cost-effective than Bangladesh. “We want to play on our own strengths, and we are strengthening on all fronts. The next two decades will definitely be India’s decade on textiles,” he emphasises.
There is also a growing thrust on man-made fibres (MMF). Duraiswamy says that today, there is a lot of significance to natural fibres and moving beyond cotton. “The Union government is also paying a lot of attention to get MMF promoted. They have removed the QCOs and India is attracting investments from Korean, Taiwanese, and Chinese companies to produce fabric here,” he says.
Industry leaders are also bullish on this trade deal. Hemant Jain, Joint Managing Director, Kewal Kiran Clothing Limited (KKCL), says that the duty-free access to the UK market implies that manufacturers will now compete on a much stronger footing against countries that have traditionally enjoyed tariff advantages.
“The agreement comes at an opportune time as global brands continue to diversify their sourcing strategies. We expect increased demand not only for garments but also for home textiles, value-added apparel, and man-made fibre-based products, where India has significant growth potential,” he says.
Additionally, this agreement can have a much bigger impact, which will be measured not just by export volumes but by India’s ability to move further up the textile value chain, says Jain. “If leveraged effectively, it can accelerate the transition from being a cost-competitive manufacturing base to becoming a preferred supplier of high-value, differentiated textile and apparel products in global markets.”
Besides this, the move is also expected to benefit the MSME sector with the opportunity extending well beyond direct exports. Kanishk Maheshwari, Co-founder and Managing Director, Primus Partners, says demand is expected to cascade through the domestic supplier ecosystem comprising fabric processors, dyeing units, embroidery, trims, packaging, logistics, and ancillary manufacturing, with export-oriented manufacturers receiving larger and more stable orders.
“This multiplier effect could strengthen cluster-based production across India’s textile hubs. The FTA, therefore, has the potential to improve capacity utilisation, formalisation, and technology adoption among MSMEs that are integrated into export value chains rather than exporting independently,” he says.
Maheshwari, however, says that the FTA should be viewed as an enabling framework rather than an automatic growth driver. “To fully realise its benefits, India must strengthen MSME readiness through support on sustainability compliance, traceability, quality certifications, digital trade capabilities, and awareness of rules of origin. Increasingly, global buyers evaluate suppliers not only on price but also on environmental performance, supply chain transparency, and delivery reliability. Building these capabilities will determine how much of the new market opportunity Indian firms are ultimately able to capture,” he says.
India will be better positioned to access other premium markets as well once exporters can successfully adapt to UK standards on quality, sustainability, and compliances. “In that sense, the agreement should be viewed not only as a trade pact but as a catalyst for upgrading India’s textile industry to compete more effectively in global value chains,” Maheshwari adds.
