Textiles and Gems Set for Massive Surge as India-UK FTA Kicks Off Competitive Edge

Textiles and Gems Set for Massive Surge as India-UK FTA Kicks Off Competitive Edge​

India's export heavy sectors, including textiles, jewellery, and footwear, are poised for a significant boost following the implementation of the India-UK Free Trade Agreement (FTA) on July 15. This landmark pact is specifically designed to eliminate steep tariffs across several high volume industries, ensuring Indian goods gain a decisive competitive advantage in the British market. The government anticipates that this agreement will elevate bilateral trade between the two nations to $100 billion by 2030.

Zero Duty Access Fuels Textile and Apparel Boom​

Analysts have noted the profound impact of the FTA on the textile sector. JM Financial highlighted that the India-UK FTA, effective from July 15, grants zero-duty access for Indian apparel and home textiles exports to the UK market. This positions India directly alongside duty free peers in terms of trade access.

The potential upside for the industry is enormous. One analyst noted that this agreement creates a level playing field, challenging historical disadvantages compared to countries like Bangladesh, which previously enjoyed preferential access. Prabhu Damodaran of the Indian Texpreneurs Federation stated that market share could double to at least 12 percent in the coming years once landed prices are balanced.

Gems and Jewellery Market Sees Substantial Opportunities​

The FTA also addresses the high value jewellery sector by eliminating import duties up to 4 percent on cut and polished gemstones, including rubies, sapphires, emeralds, lab grown diamonds, and silver jewellery. This measure positions Indian exporters to aggressively capture a larger share of the UK's $4 billion jewellery import market.

The Gem & Jewellery Export Promotion Council (GJEPC), an apex industry body, expects exports of jewellery and gems to the UK to more than triple from current levels of $2.5 billion in the coming years. Prior to the pact’s implementation, GJEPC organized a Buyer Seller Meet in London to facilitate partnerships and accelerate business opportunities under the new trade framework.

Leather and Footwear Exports Gain Competitive Advantage​

The agreement includes critical tariff reductions for the leather and footwear industry by eliminating 16 percent duties. This sector is poised to see accelerated growth, with expectations of adding 5 percent to India's UK market share and pushing exports beyond $900 million, directly benefiting MSMEs in Agra and Chennai.

These benefits are significant given that the agreement opens access to the UK’s massive $8.9-billion leather and footwear market. While India holds global exports in this sector at approximately $5.6 billion, these tariff reductions stand to regain a competitive advantage over rivals such as China and Vietnam.

Trade Dynamics and Future Growth Trajectory​

Globally, the UK is already India’s fifth largest merchandise export destination. However, there remains significant scope for more balanced trade given that the UK accounts for only around 1 percent of India's merchandise imports. This imbalance indicates substantial headroom for diversification in the bilateral relationship.

The Department for Business and Trade estimates that the FTA will boost imports from India by roughly £2.9 billion into the UK market. Specific projections indicate a rise in clothing imports by £475 million (45 percent), textiles by £175 million (40 percent), and footwear by £55 million (30 percent). In 2025, India’s exports to the UK stood at about $754 million, while imports from the United Kingdom reached around $3.07 billion.