The UK and India have signed a landmark trade agreement intended to increase the volume and depth of trade between the two countries.

The London-headquartered UK Fashion and Textile Association (UKFT) has been working closely with the UK government to ensure that the deal is meaningful and beneficial for the UK fashion and textile industry at the same time as protecting the UK manufacturing industry from unfair competition and protecting the UK’s trading relationships with other countries under the Developing Countries Trading Scheme (DCTS) with countries including Pakistan and Bangladesh.

Once ratified and brought into application, this will be the UK’s largest trade agreement to-date after the UK-EU CEPA agreement. The final text of the agreement is expected to be released soon and UKFT will provide a detailed briefing for members to enable them to prepare for the agreement when it comes into force. UKFT is already working on a number of projects to support exports of fashion and textiles to India and will publish a separate report on the Indian market in the coming weeks.

For UK retailers, importers and consumers Indian tariffs will be slashed, locking in reductions on 90% of tariff lines, with 85% of these becoming fully tariff-free within a decade. UK shoppers and retail businesses could see cheaper prices and more choice on products fairly quickly including clothing and footwear as the UK liberalises tariffs.

For UK fashion and textile exporters, they are promised a competitive edge over international competitors when entering India’s enormous market, forecasted to become the third largest global economy within three years. India has undertaken to release goods as quickly as possible after arrival at customs and to work with the UK on one streamlined portal for trade and publish customs procedures in English.

Currently many UK brands have found that they need to manufacture locally in order to meet India’s challenging price points. UKFT understands the agreement provides for flexible Rules of Origin (ROO) for goods sold by UK companies along similar lines to those agreed with Australia and New Zealand but UKFT will verify and confirm this as soon as the final treaty text has been published. As well as reducing tariffs, other barriers to trading will also be cut, although questions remain as to whether all non-tariff barriers such as Quality Control Orders, will be removed.

“UKFT broadly welcomes the announcement of the UK-India trade agreement,” says UKFT CEO Adam Mansell. “It will provide many opportunities for the British fashion and textile industry but we also have to be mindful of the challenges as Indian exports to the UK already vastly outstrip our more modest exports and this is likely to continue. As always, we need to see and understand the detail but UKFT is already working on a number of activities in the market to help UK fashion and textile businesses in this exciting but challenging market.”

www.ukft.org