The Free Trade Agreement (FTA) between India and the UK is eagerly anticipated by the textile industry in that country.
As there was duty-free access to the sizable garment market, the sector anticipates that it will be better able to compete with neighboring Bangladesh.
India is the fifth largest garment supplier to the UK, while Bangladesh is the second. UK had imported garments worth $20.889 billion during 2021.
With garment supply of $3.019 billion, Bangladesh accounted for 14.45 percent in UK’s total apparel imports. China’s share was 21.57 percent.
Turkiye and Italy also had a share greater than India’s 5.24 percent ($1.094 billion) in 2021.
India and the UK have both stated that they are aiming to bring the FTA negotiations to a swift conclusion.
Regarding this, Indian commerce and industry minister Piyush Goyal and UK secretary of state for international trade Kemi Badenoch met for the sixth round of FTA negotiations after a gap of more than four months.
Sanjay Jain, managing director of TT Limited and former chairman of the Confederation of Indian Textile Industries (CITI) said, “The proposed trade deal with the UK is very important for Indian industry as UK is a large market and Indian textile industry will have duty-free access to the important market. It will provide much needed boost to the industry, and the trade deal to get signed in the first half of 2023.”
Indian industry expects the FTA to provide a level-playing field with Bangladesh, which has duty-free access to the UK due to preferential treatment on the basis of its Least Developed Country (LDC) status. Currently, Indian apparel exports to the UK attract around 10 per cent duty.
K Vel Krishna, managing partner of Deiveegam Dyers said,“Proposed FTA with the UK is expected to be landmark development as it can provide better edge to Indian exporters. They will be able to offer competitive prices to UK’s buyers. They will also get duty-free access to the market similar to Bangladeshi exporters.”
Besides that, Raja M Shanmugham, former president of Tiruppur Exporters’ Association (TEA), “FTAs are very important trade arrangements between the trading countries in this era of universal market. The proposed trade deal with UK is important because it will open large consuming market further. It would also be followed with similar trade arrangement with Europe.”
On the other hand, the proposed trade deal with the UK is expected to open doors to an important market.
Indian textile sector, more specifically the garment industry, will get a boost as Indian exporters will be able to export there without duty. However, Indian government needs to ensure raw material security.
Currently, Indian cotton is costlier than ICE cotton which is paralysing competitiveness of Indian exporters.