Shares of Indian textile exporters surged up to 19% on Wednesday after India and the United Kingdom concluded negotiations for a landmark free trade agreement (FTA) that eliminates import duties on textiles and garments.
Gokaldas Exports led the rally, climbing as much as 18.8% to Rs 1,013 on the BSE. Shares of KPR Mill rose 10.1% to Rs 1,122.05, while Arvind Ltd gained 5.8% to Rs 387. The rally was driven by optimism that zero-duty access to the UK market will boost Indian textile exports and improve competitiveness against countries like Bangladesh and Vietnam.
The agreement between the two countries, clinched on Tuesday, is expected to enhance Indian exports by eliminating the existing 8–12% import duty on textiles and garments in the UK. The move comes after nearly three years of stop-start negotiations and is considered one of India’s most comprehensive trade deals to date.
Zero tariff boost for Indian exporters
Under the FTA, 99% of Indian exports will enjoy duty-free access to the UK, covering nearly the entire trade value between the two countries. For the textile sector, the removal of tariffs is particularly significant, providing a level playing field with key rivals in Asia and reducing the cost of Indian products in the British market.
The deal is projected to boost bilateral trade to over $100 billion by 2030 from the current $60 billion, with India’s textile, footwear, leather, marine products, and toy exports among the key beneficiaries.
Broader implications of the FTA
The India-UK pact also includes provisions for reduced tariffs on UK exports, enhanced access to services markets, and easier movement of professionals. India will reduce import duties on 90% of tariff lines, with 85% becoming fully tariff-free within ten years.
The agreement is expected to contribute $6.4 billion annually to the UK economy by 2040. British Prime Minister Keir Starmer called it a "new era for trade," while Indian Prime Minister Narendra Modi hailed it as "ambitious and mutually beneficial."
The deal, which still requires legal checks and ratification, is being seen as a potential model for India’s ongoing trade negotiations with the European Union, Australia, and New Zealand.
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Source Name : Economic Times