The timing of the FTA is of the essence, given that it was an opportunity waiting to happen for a long time and has the potential to give India's textile exports a shot in the arm, considering the challenging global business environment.
Against this backdrop, the India-UK FTA assumes great significance given that Trump's tariff tantrums have upended the global economy, forcing IMF/World agencies to revise global trade downward.
Fashion Guru
The recent rise of India, especially in the post-pandemic world, has ushered in a new era of geopolitics, offering a once-in-a-lifetime opportunity for the Indian economy.
Putting the situation in context, as per the credible sources, the UK Department for Business & Trade, 2024 trade data, pre-FTA, UK tariffs on Indian apparel were in the range of 4 to 12%; while the happy news is that post-FTA it will be zero (0) percent on 99 percent of what India exports to the UK.
Again, it will positively impact Indian garments, making them more competitive by making them, as a back-of-the-envelope calculation, one would reckon, cheaper by 8-10%, fueling demand for cotton merchandise and home textiles per se. Stepping back to 2024, the status is that India holds a 5.6 percent share of the UK’s overall apparel imports, which stands at £3.2 billion, and by 2030 the predicted target is to have a much more respectable share of 12 percent, or say an aggregate of £4.35 billion, as the two markets will be more aligned.
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Considering that the situation today is very iffy, the FTA's direct and indirect effects on the Indian fashion and apparel market can be assessed/viewed from varied angles, given that global supply chains are fractured amid a fragile global economy; therefore, it is asymmetrical, putting a spotlight on India's macro stability, so all in all, India's textiles today are in a good place.
Key Objectives
It has to be acknowledged that the Honorable PM has huge expectations of our heritage sector, like textiles, which has unlimited potential to generate employment.
The Textiles Ministry, too, has established ambitious targets, aiming to grow the internal textile market to a robust $350 billion by the end of this decade (2030). Simultaneously, there's a focus on boosting textile exports to a noteworthy $100 billion in ever-evolving global geopolitics. Though most of the trade experts are finding it to be ambitious, it is always pragmatic to be aspirational as a directional call.
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Benefits of the India-UK FTA:
The recently established free trade is a comprehensive and wide-ranging win-win agreement between India and the United Kingdom and is predicted to considerably boost and promote the Indian textile industry's presence in the UK market to help fill UK retail shelves, making India's textiles more competitive, particularly for apparel and home textile goods, by removing taxes/tariff reductions on labour-intensive sectors, of which the textile sector is a part of this package.
All is well!