India’s textile and apparel industry is on the cusp of a significant expansion, driven by the recent finalization of Free Trade Agreements (FTAs) with key global markets. The agreements, particularly with the European Union and the United Kingdom, are expected to remove long-standing tariff barriers, thereby boosting the competitiveness of Indian exporters and opening up vast new market opportunities.
The landmark India-EU Free Trade Agreement, concluded in early 2026 after years of negotiations, promises to grant Indian textile products zero or near-zero duty access to the European Union market. This development is poised to directly impact India’s export competitiveness, allowing it to vie more effectively with countries like Bangladesh and Vietnam, which already benefit from preferential access. Tariffs previously ranging between 8% and 12% on Indian textiles entering the EU are set to be eliminated, a move that could unlock billions in demand and create millions of jobs within the sector.
Similarly, the India-UK FTA, signed in 2025, has already begun to alter the competitive landscape for Indian textile and apparel exporters. This agreement provides preferential access to one of the world’s most mature and design-driven consumer markets by reducing and eliminating tariffs on a wide array of garments, fabrics, and made-ups. This has narrowed the gap with competing nations and is encouraging longer-term sourcing commitments from British buyers.
Information was available with The Chenab Times indicating that these FTAs are expected to significantly boost India’s textile exports. For instance, exports to the EU and UK, which stood at $9.76 billion in FY25, are estimated to rise to $15 billion once the FTAs are fully operationalized. Industry experts project that the benefits from these trade deals will likely accrue from FY28 onwards, with an expected 10-15% revenue growth.
The Indian textile industry, a major contributor to the nation’s GDP and the second-largest employer, is actively working to reduce its concentration on single markets. Having been significantly impacted by tariff escalations in markets like the US in the past, companies are now keen on geographical diversification. European and UK buyers are proactively seeking to diversify their sourcing away from traditional hubs, and the tariff parity offered by the FTAs will significantly support India’s efforts in this regard.
Major Indian textile players have already signalled expectations for export growth in these new markets. Some companies are investing in establishing showrooms in Europe and increasing their brand visibility through trade fairs and appointing local executives. This strategic push aims to strengthen their presence and build more geographically diversified customer footprints, even if it requires short-term margin adjustments.
India’s textile exports to the European Union and the United Kingdom stood at nearly $10 billion during the 2024-25 financial year. Industry estimates suggest the figure could rise substantially over the next few years if the proposed trade agreements are implemented successfully and global sourcing trends continue shifting in India’s favour.
