India’s Textile Industry looks beyond the US to Europe and the UK

India’s textile exports to the European Union and the United Kingdom stood at nearly $10 billion during the 2024-25 financial year, and industry estimates suggest this figure could rise substantially over the next few years. This projected growth hinges on the successful implementation of proposed free trade agreements and global sourcing trends continuing to shift in India’s favour. The benefits of these proposed trade deals are likely to become more visible from the 2027-28 financial year onward, with textile export revenues expected to register strong double-digit growth. Experts also believe the shift could attract fresh long-term investments into India’s textile sector, particularly in manufacturing, processing, and apparel production.

To prepare for higher order volumes once the agreements come into effect, several exporters are already expanding vendor networks and production partnerships. However, industry participants note that capacity expansion remains a key challenge for the sector. While some companies are increasing domestic production capabilities, others are actively exploring asset-light expansion models through partnerships with overseas factories to meet future demand without significant capital expenditure. These corporate moves come as industry observers note that buyers from Europe and the UK have already started placing trial orders with Indian manufacturers in anticipation of the implementation of the trade agreements.

Exporters highlight that buyers in Europe have already begun increasing engagement with Indian suppliers and are gradually diversifying sourcing networks away from countries such as Bangladesh and Vietnam. To capitalize on this, manufacturers are actively strengthening their presence in European markets through participation in international trade fairs, expansion of overseas showrooms, aggressive marketing campaigns, and the appointment of local representatives to improve customer outreach and buyer engagement. This aggressive strategy marks a conscious move by the sector, which faced pressure last year due to tariff-related disruptions in the US market, to pursue geographical diversification and reduce the risks associated with reliance on a single export destination.

Tamil Nadu’s textile and apparel industry is structuring a major export push into European and British markets as proposed free trade agreements are expected to enhance India’s competitiveness. Industry stakeholders emphasize that the anticipated trade agreements with the European Union and the United Kingdom could significantly improve India’s position in global textile exports. By creating tariff parity with competing manufacturing hubs, these pacts are fundamentally designed to reduce the sector’s long-standing dependence on the United States market.