Mumbai, May 8 (IANS) India is expected to double its market share from 6 per to 12 per cent in the UK’s ready-made garments imports following the free trade agreement, translating into an incremental annual export opportunity of around $1.1-1.2 billion in the near to medium term, according to a CareEdge Ratings report released on Thursday.
The UK is among the top five ready-made garments (RMG) markets, with imports of around $20 billion in 2024. Currently, India holds a 6 per cent market share in the UK’s RMG imports, while Bangladesh, Turkey, Cambodia, Vietnam, and Italy enjoy duty-free access, giving them a 12 per cent tariff advantage over India.
However, the India-UK FTA is a game changer for India’s RMG sector, creating a level playing field vis-a-vis key competing nations for accessing the nearly $20 billion RMG market of the UK, the report states.
Despite the applicability of a 12 per cent tariff, India had gradually gained market share in the UK market over the past four years, while China had lost some ground during the same period.
With the signing of the FTA with the UK, India now has a clear 12 per cent duty advantage over China, the largest RMG exporter to the UK, with exports of $5 billion in 2024. China has lost its market share in the past few years, and it is expected to continue losing its share in the UK’s RMG market due to its declining competitiveness, backed by rising labour costs and the ‘China Plus One’ sourcing strategy adopted by global apparel brands and retailers, the report states.
Socio-political uncertainties in Bangladesh, which exported RMG of around $4 billion to the UK in 2024, may also lead apparel brands and retailers with a significant presence in Bangladesh to diversify their sourcing, amongst others, to India.
Krunal Modi, Director at CareEdge Ratings, said: “With a clear 12 per cent duty advantage over China and prevailing socio-political uncertainties in Bangladesh, which together account for nearly 45 per cent of market share in UK’s RMG imports, India is expected to double its share in this market from 6 per cent in 2024 to 12 per cent in the near to medium term. The India-UK FTA holds significant potential to boost investments across the textile value chain, generate employment, particularly for women in the labour-intensive RMG sector and increase foreign exchange earnings.”
The RMG industry accounted for a significant share of around $525 billion in the overall global textile and RMG trade, which stood at approximately $900 billion in 2024. Major markets include the European Union, the USA, the UK, Japan, Canada, and South Korea, which together accounted for nearly 44 per cent of global imports in 2024.
–IANS
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