India's FTA with UK could help textile exports offset US market losses: CareEdge

The loss incurred due to the imposition of reciprocal tariffs on Indian textile exports to the United States (US) may be offset by a surge in exports to the United Kingdom (UK), buoyed by the recently concluded India-UK Free Trade Agreement (FTA), said CareEdge Ratings in a report.

- TBG NETWORK

The report said that the ongoing FTA negotiations with the European Union are expected to open additional avenues, signaling a strategic realignment of India's textile trade landscape.

The India-UK FTA is a game changer for India's Ready-made garments (RMG) and home textile sectors, creating a level-playing field vis-a-vis key competing nations for accessing the nearly USD 23 billion UK import market, the report added.

"India's textile exports is expected to decline by 9-10 per cent in CY26. With expected loss of revenue and partial tariff absorption, PBILDT margin of Indian RMG and home-textile exporters is expected to decline by 300-500 bps," stated Akshay Morbiya, Assistant Director at CareEdge Ratings.

However, the degree of decline will ultimately hinge on how effectively Indian exporters can negotiate pricing with their US customers to retain volumes, he added.