Textile company shares experienced significant gains on Thursday's trading session, with Welspun Living leading the rally at 5.7% to ₹155, followed by Gokaldas Exports climbing 4.8% to ₹764.95. According to reports from CNBC TV18, other notable performers included Kitex Garments advancing 3.8% to ₹160.99, KPR Mill gaining 2.5% to ₹1,068, and Arvind remaining largely flat at ₹497.85. The rally extended beyond textiles, with Raymond edging up 0.1% to ₹592.55 among other major apparel stocks. In comparison, the BSE Sensex was down 0.11% at 77,070 during the same trading period.
India and the UK have confirmed the implementation date for their landmark Comprehensive Economic and Trade Agreement (CETA), which will come into force on July 15, 2026. As reported by Moneycontrol, this marks the operationalisation of India's first bilateral trade deal with a European or Western country, nearly a year after the pact was signed. The agreement provides zero-duty access to a wide range of Indian exports, including textiles and apparel, electronics, chemicals, pharmaceuticals, toys, and gems and jewellery. For labour-intensive sectors such as textiles and clothing, tariffs of up to 12% currently imposed by the UK will be reduced to zero. According to the Indian government, around 99% of tariff lines covering nearly 100% of India's trade value to the UK will eventually become duty-free under the agreement. Indian textiles and apparel across 1,143 tariff lines previously faced duties of up to 12% when entering the UK, with the FTA eliminating these entirely.
Pallab Banerjee, Managing Director of Pearl Global Industries, one of India's largest listed apparel exporters, explained the commercial reality of the FTA's impact. India currently exports approximately $1 billion to $1.5 billion worth of apparel to the UK annually, growing at just 3 to 4.5% a year. As reported by ET Now, this growth rate was suppressed precisely because the tariff disadvantage made it commercially unattractive to invest in expanding UK-bound capacity from India. "Whenever I think of capex in India, it's a challenge if I'm more profitable out of Bangladesh or Vietnam production," Banerjee said. With the tariff equalised, that calculation changes significantly. Pearl Global already serves major UK retailers — currently supplied predominantly from Bangladesh and Vietnam operations — and those same retail clients are now actively looking at sourcing from India given that the 10% cost disadvantage has been removed.
India's textile exports to the UK represent $1.5 billion in apparel and $0.3 billion in home textiles, according to CNBC TV18 reports. The UK's textile imports stood at $28.7 billion, making India a significant player in this market. India's market share in UK apparel imports stands at 7.1% ($19.84 billion total) while home textile imports account for 10.5% ($2.6 billion total). The FTA benefits are expected to start accruing from FY27 for the UK FTA and FY28 for the EU FTA, with potential US trade deals providing additional acceleration. India has been strong in niche fashion embroidered, hand-worked, artisanal garments but almost entirely absent from core wardrobe staples - the basic shirts, trousers, and everyday garments that dominate global trade volumes. Exports to the EU and UK, which stood at USD 9.76 billion in FY25, are estimated to rise to USD 15 billion once the FTAs are fully operationalised, with industry experts projecting 10-15% revenue growth from FY28 onwards. The UK government estimates that the agreement will reduce tariffs on UK exports to India by up to EUR 400 million a year when it comes into force, potentially increasing to EUR 900 million after 10 years.
The FTA is expected to encourage fresh investments in India's textile and apparel sector, which is labour-intensive and creates significant employment opportunities. As reported by The Economic Times, improved profitability is likely to encourage manufacturers to increase capital expenditure within India rather than expanding production in competing countries. Banerjee believes the agreement will create opportunities beyond traditional fashion and embroidered garments, helping India build infrastructure to become a stronger supplier in core basic garments that dominate global apparel trade. The textiles and apparel sector continues to maintain a Revealed Comparative Advantage (RCA) above one, indicating structural specialization in textile exports relative to the global average. With the India-EU FTA also expected to be signed this year-end, granting zero duty access to a $236 billion market, India expects to gain 5% additional market share in the next two years in the UK and a 50% - 100% increase of textile exports to the EU over the next five to seven years post the FTA. UK imports from India in the textiles, apparel and leather sector are expected to rise by approximately EUR 2.9 billion - equivalent to an 85% increase relative to a baseline of no FTA.
