India-UK FTA weaves growth story for labour-intensive sectors: Experts

Exporters from labour-intensive sectors, including textiles & garments, leather, footwear, farm & processed food and gems and jewellery, will likely reap benefits of the duty breather under the India-UK free trade agreement (FTA), and better diversify their markets amid tariff uncertainties in the US, experts said on Tuesday.

According to the commerce ministry, India will gain from the UK's tariff elimination on about 99% of products. These account for nearly 100% of the value of India's exports to that country.

Indian textiles and garments exporters would be among the biggest beneficiaries, given the volume of supplies to the UK. These exporters, who have been facing up to a 12% tariff, will now have zero-duty access to the UK market.


India’s garments exports alone were in excess of $1.3 billion until January last fiscal, up 20% from a year before. India’s share in the UK’s apparel market is about 6%, experts said, highlighting huge growth potential in this segment.

Sanjay Jain, former chairman of the Confederation of Indian Textile Industry termed the trade deal a “game changer” for the textiles industry.

The deal with the UK “opens the floodgates of apparel exports to UK”, said Sudhir Sekhri, chairman of the Apparel Export Promotion Council.

The textiles and garments sector is the biggest employer in India after agriculture, having directly employed over 45 million people.

The FTA “unlocks fresh opportunities by reducing tariff barriers, encouraging technology exchange, and enhancing market access”, said Mukesh Kansal, chairman at CTA Apparels.

Similarly, India’s exports of footwear and gems & jewellery, currently taxed up to 16% and 4%, respectively, will be scrapped by the UK. India shipped out footwear worth $184 million until January last fiscal, up 4% from a year earlier.

Gems & jewellery exports to the UK were to the tune of $941 million in 2024, according to Kirit Bhansali, chairman of the Gem and Jewellery Export Promotion Council.

The FTA is expected to substantially accelerate our gems & jewellery exports to the UK to about $2.5 billion within the next two years, he said.

Similarly, the leather sector stands to benefit from the zero duty market access. India’s exports of leather and related products were up 21% year on year until January last fiscal at $149 million.