India is poised to significantly expand its presence in the UK’s readymade garment (RMG) market following the finalization of the India-UK Free Trade Agreement (FTA), according to CareEdge Ratings. The FTA is expected to double India’s market share in UK RMG imports from 6% in 2024 to 12%, creating an incremental export opportunity of $1.1–$1.2 billion annually in the near to medium term. This gain stems from the elimination of a 12% tariff disadvantage India previously faced against duty-free competitors like Bangladesh, Vietnam, and Turkey.
The agreement provides India a distinct tariff edge over China, currently the largest RMG exporter to the UK. With China’s competitiveness waning and socio-political instability affecting Bangladesh, global brands may increasingly shift sourcing to India. The FTA is also likely to spur investments, employment—especially for women—and foreign exchange earnings in India’s textile sector.
However, India’s reliance on cotton-based textiles may limit its ability to fully capitalize on the global demand, which favors man-made fibers. Still, India’s existing capacity and policy support provide headroom for a 10–15% increase in RMG exports. The UK RMG market, valued at $20 billion in 2024, presents a major growth opportunity for Indian exporters under the new trade terms.
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