India-UK Trade Pact May Nearly Double Exports by FY31
By jayesh chouhan 2026-07-21 12:28:34
India-UK Trade Pact May Nearly Double Exports By FY31; Textiles, Leather Among Biggest Beneficiaries
India's exports to the UK are projected to rise to $24.2 billion by FY31 from $13.5 billion in FY26, following the implementation of the India-UK Comprehensive Economic and Trade Agreement (CETA), according to a Bank of Baroda Research report.
The trade pact, which came into force on July 15, is expected to significantly boost Indian exports by eliminating tariffs on nearly all goods shipped to the UK. The report estimates bilateral trade between the two countries could increase to $41 billion by FY31, up from $25.1 billion in FY26, with India's exports expected to outpace imports, further widening its trade surplus.
Textiles & Apparel To Gain
The agreement removes the around 12% tariff previously levied on Indian textile and apparel exports, placing Indian manufacturers on a level playing field with competitors such as Bangladesh and Pakistan.
Bank of Baroda Research estimates exports from the sector could increase to $3.1 billion by FY31 from $2.1 billion over the next five years. Listed companies with notable UK exposure include Gokaldas Exports, KPR Mill and Welspun Living, according to company disclosures.
Leather, Manufacturing Sectors Also Stand To Benefit
The report noted that around 99% of India's exports by value will now enjoy tariff-free access to the UK. This is expected to improve the competitiveness of labour-intensive sectors such as textiles and leather, as well as manufacturing industries including electronics, pharmaceuticals and engineering goods.
On the import side, India has adopted a phased approach to tariff reductions while continuing to protect sensitive sectors such as dairy, agriculture, smartphones and electric vehicles.
According to Bank of Baroda Research, the agreement is expected to strengthen India's export competitiveness, particularly for MSMEs and labour-intensive industries, while supporting a larger trade surplus with the UK over the next five years.
