Indian Textiles & Apparel Gain Duty- Free Access To The UK

Trade & Policy

Indian Textiles & Apparel Gain Duty- Free Access To The UK

India-UK Trade Pact Takes Effect From July 15, Giving Indian Textiles Duty-Free Access

Indian textile and apparel exporters have duty-free access to the UK from July 15, 2026, as the India-UK Comprehensive Economic and Trade Agreement (CETA) comes into force. The agreement is expected to significantly improve the competitiveness of Indian products in one of Europe's largest consumer markets by eliminating UK import duties of up to 12% on textiles and clothing. The UK is among the top 10 markets for Indian textiles and clothing.

The trade pact, signed alongside the Double Contribution Convention (DCC) on social security, is one of India's biggest bilateral economic agreements in recent years. Besides boosting merchandise exports, it is expected to expand opportunities for Indian service providers and reduce employment costs for Indian professionals working temporarily in the UK.

Zero-duty access for almost all exports

Under CETA, around 99% of India's exports to the UK, covering nearly 100% of bilateral trade value, will enjoy zero-duty access. Apart from textiles and clothing, the agreement removes tariffs on a wide range of products. UK duties of up to 70% on processed food products, 21.5% on marine products, 18% on engineering goods and auto components, 16% on leather and footwear, and 8% on chemicals and pharmaceutical products will also be eliminated.

The removal of these tariffs is expected to make Indian exports more competitive while creating new opportunities for manufacturers, MSMEs, farmers, fishermen and workers.

Big opportunity for the textile sector

For India's textile and apparel industry, the agreement provides an important competitive advantage in the UK market.

With import duties of up to 12% being eliminated, Indian exporters are expected to improve their pricing against competing suppliers. The agreement is also likely to encourage higher exports of garments, home textiles, fabrics and other value-added textile products.

The textile sector, along with leather, engineering goods, marine products and processed foods, is expected to be among the biggest beneficiaries of the trade deal.

Major boost for services exports

The agreement goes well beyond trade in goods. The UK has offered one of its most comprehensive market access commitments for services, covering all major sectors and 137 sub-sectors of interest to India.

Indian companies operating in IT and IT-enabled services, financial services, engineering, healthcare, education, professional services, telecommunications and consultancy will benefit from greater market access and improved regulatory certainty.

The agreement also provides easier mobility for business visitors, intra-corporate transferees, contractual service suppliers, independent professionals and investors.

In a first-of-its-kind provision, the UK will provide dedicated annual mobility opportunities for 1,800 Indian chefs, yoga instructors and classical musicians.

Social security agreement lowers costs

Coming into effect alongside CETA is the Double Contribution Convention (DCC), which exempts Indian employees and employers from making social security contributions in both India and the UK during temporary overseas assignments.

The exemption period has been extended from three years to five years, a significant improvement over the earlier arrangement.

More than 75,000 Indian professionals and over 900 Indian companies are expected to benefit from the agreement. Besides reducing employment costs, it is expected to strengthen India-UK collaboration in knowledge-intensive and service sectors.

Sensitive sectors remain protected

While opening the UK market for Indian exports, India has safeguarded several sensitive agricultural sectors from increased imports.

Products such as dairy, cereals, millets, edible oils, oilseeds, apples and several vegetable products have been kept outside the tariff concession framework, protecting domestic farmers from import competition.

Steel exporters receive relief

The two countries have also reached an understanding on the UK's new steel measures, which came into effect from July 1, 2026.

According to the agreement, around 85% of India's steel exports will remain outside the scope of the UK's steel measures. For the remaining product categories, Indian exporters will continue to have access through a combination of country-specific quotas, residual quotas and the Authorised Use Scheme.

A modern trade agreement

Spread across 30 chapters, CETA is one of India's most comprehensive trade agreements.

Besides tariff reductions, it covers digital trade, telecommunications, financial services, intellectual property, government procurement, innovation, sustainability, MSMEs and transparency. The agreement is expected to strengthen supply chains, promote technology collaboration and create a more predictable business environment for companies operating in both countries.

Five years of negotiations

The agreement traces its origins to the India-UK Enhanced Trade Partnership launched in 2021 and the India-UK Roadmap 2030, which aims to double bilateral trade to US$100 billion by 2030.

Following 14 rounds of negotiations, CETA was concluded in May 2025 and formally signed in London in July 2025. The Double Contribution Convention was signed in February 2026, with both agreements now set to take effect on July 15, 2026.

Commerce and Industry Minister Piyush Goyal said the agreement removes long-standing tariff barriers and creates a level playing field for Indian exporters. He said sectors such as textiles, leather, marine products, engineering goods and processed foods would now be able to compete in the UK market without tariff disadvantages, while the social security agreement protects the financial interests of Indian professionals on temporary overseas assignments.

Commerce and Industry Minister Piyush Goyal said the agreement removes long-standing tariff barriers and creates a level playing field for Indian exporters. He said sectors such as textiles, leather, marine products, engineering goods and processed foods would now be able to compete in the UK market without tariff disadvantages, while the social security agreement protects the financial interests of Indian professionals on temporary overseas assignments.

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