[Answered] Discuss the potential benefits of the UK-India FTA for the Indian textile industry. Briefly analyze the key adjustments and strategic realignments the sector needs to undertake in terms of aesthetics, quality, and practices to effectively capitalize on these opportunities in the global market.

Introduction

The India–UK Free Trade Agreement (FTA), signed on May 6, 2025, marks a significant milestone in bilateral trade, offering zero-tariff access to Indian textile and apparel exports. The Indian textile and apparel (T&A) sector, which employs over 45 million people, stands to benefit immensely from this preferential treatment in one of the world’s most sophisticated consumer markets.

Potential Benefits of the FTA for the Indian Textile Industry

1. Zero-Duty Market Access: The removal of UK’s pre-FTA average tariffs of 11-12% on Indian apparel gives Indian products a competitive edge over global rivals like Bangladesh and China.
2. Expansion in High-End Markets: The UK is a $26.9 billion apparel importer, with India holding just 6% market share ($1.19 billion). The FTA can potentially double India’s share, enabling diversification beyond traditional markets.
3. Boost to Labour-Intensive Exports: Labour-intensive sectors like footwear, toys, and textiles gain through increased job creation and production volumes.
4. Increased Global Visibility: The FTA could elevate India’s status as a credible alternative to China, especially with rising anti-China trade sentiment in Western economies.
5. Blueprint for Future FTAs: The success of this deal can strengthen India’s negotiating position in FTAs with the EU and US, which collectively import over $277 billion worth of apparel.

Key Adjustments and Strategic Realignments Required

1. Fast-track PM MITRA Parks: Integrated textile parks in Gujarat and Tamil Nadu must be operationalised to create efficient, export-oriented hubs.

1. Correct Inverted GST on MMFs: MMF garments, crucial for athleisure and activewear, face higher input taxes than finished products. GST rationalisation is imperative to enhance competitiveness.
2. Export Compliance Simplification: Eliminate bureaucratic hurdles in export documentation and subsidies, especially for MSMEs.
3. Modernisation of Value Chain: Address the fragmented production structure — cotton in Gujarat, yarn in Tamil Nadu, garments elsewhere — to reduce logistical delays (India’s delivery time is 63 days vs. 50 days in Bangladesh).
4. Global Fashion Alignment: India must adapt to fast fashion cycles and consumer aesthetics of UK and EU markets through design innovation and trend responsiveness.
5. Compliance and Sustainability Standards: Prepare for EU’s Corporate Sustainability Due Diligence Directive (CSDDD) by 2029. Supply chains must integrate ESG compliance, traceability, and green audits.
6. Shift to High-Value Segments: Invest in functional fabrics, MMF-based apparel, and technical textiles, which dominate global high-margin segments.
7. Plug into Global Retail Chains: Build B2B capabilities to become preferred suppliers for large UK retailers by adhering to quality, cost, and speed standards.

Conclusion

The India–UK FTA offers a rare, transformative opportunity for India’s textile sector to reclaim its historical prominence. However, trade deals alone are not sufficient. Structural reforms in policies, alignment with global aesthetics, and modernised practices must follow. As aptly stated, “a stitch in time saves nine” — for India’s textile industry, this is the moment to act decisively and strategically to weave a globally competitive future.