Indian companies in labor-intensive sectors like textiles, garments, footwear, automobiles, and marine products are set to benefit from the India-UK free trade agreement that came into effect recently. The agreement eliminates or reduces tariffs on nearly 99% of Indian exports to the UK, leveling the playing field with countries like Bangladesh and Pakistan. This move is expected to enhance India’s competitiveness in the UK market.
According to a report by the BBC, Dipali Goenka, the CEO of Welspun Living, a company producing championship towels for Wimbledon, mentioned that the trade deal has facilitated closer collaboration with British buyers. She highlighted that British brands, which are their clients, have engaged in strategic planning sessions in India to outline future business strategies. This proactive approach was previously limited to U.S. customers but has now extended to the UK market.
Goenka emphasized the significance of this agreement by pointing out the disparity in market share between Pakistan and India in the UK’s home textiles sector. While Pakistan holds a dominant 55% share, India’s share stands at a mere 6-7%. The CEO expressed optimism that this trade pact would help bridge this gap and create new opportunities for Indian businesses in the UK.
The UK government has hailed this trade agreement as its most substantial bilateral pact post-Brexit. Analysts predict that industries previously subject to UK tariffs ranging from 4% to 16%, such as textiles, footwear, carpets, cars, seafood, and select fruits, are likely to witness a surge in export demand. This surge is anticipated to lead to increased export volumes and improved profit margins, signaling a positive outcome for the sectors involved.
Experts suggest that while the impact of the deal may not be revolutionary, it is expected to bring incremental benefits. They noted that historically, India has underutilized free trade agreements due to limited awareness among small businesses about the associated regulations. The report also highlighted data from the Global Trade Research Initiative (GTRI), indicating that India’s exports to the UK amounted to $13.4 billion in FY26, with more than half entering the UK duty-free under the most favored nation regime.
