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Dear
Friends,
The past few weeks have been marked by momentous developments that signal a new and defining phase in India’s trade engagements—especially for the textiles and clothing sector. In a world marked by geopolitical uncertainties and economic realignments, the Indian textile industry has stood resilient and dynamic, responding swiftly to both opportunity and adversity. The recent breakthroughs offer both a cause for optimism and a reminder of the critical policy engagements needed to maintain our global edge.
India–UK CETA: A Game Changer
The signing of the India–UK Comprehensive Economic and Trade Agreement (CETA) represents a truly historic step forward. Guided by the visionary leadership of Hon’ble Prime Minister Shri Narendra Modi ji, this Agreement is poised to significantly strengthen bilateral trade, generate employment opportunities, and unlock immense growth potential for India’s textiles and clothing exports.
The most tangible benefit of the Agreement is zero-duty market access for 99% of Indian exports, which includes 1,143 tariff lines in textiles and clothing. This is a long-awaited relief for Indian exporters who have struggled with a duty disadvantage, particularly when competing against countries like Bangladesh, Pakistan, and Cambodia, which have traditionally enjoyed duty-free or preferential access to the UK.
With a level playing field now firmly in place, Indian exporters—especially those in the home textiles and garments segments—have a rare and timely opportunity to capture a greater share of the UK market. Projections suggest that India's market share could expand from the current 6.1% to 10–12% over the next three years. This would not only enhance export revenues but also stimulate growth across key production hubs such as Tirupur, Surat, Ludhiana, Bhadohi, and Moradabad.
Moreover, the Agreement promises to benefit labour-intensive sectors, drive demand for value-added products, and boost investments in design, technology, and compliance. It sets the stage for long-term strategic engagement between India and the UK in textiles and beyond.
Emerging Concern: Proposed US Tariffs
While the UK Agreement has opened new doors, we are also confronting a significant challenge in our largest export market—the United States. The recent announcement by President Trump on the imposition of punitive tariffs of up to 25% on Indian textiles and garments—effective August 1, 2025—alongside a possible penalty, has triggered widespread concern across the industry.
If implemented, these tariffs would not only make Indian products less competitive in the US market but could lead to order cancellations, stockpiling, and a reduction in retail off-take. The situation threatens to undo the momentum Indian exporters have built over recent years, particularly in cotton-rich categories such as bed linen, apparel basics, and towels, where India has traditionally enjoyed a strong foothold.
Given the labour-intensive nature of our industry, the fallout of such tariffs would directly impact employment, MSMEs, and the broader textile value chain. We strongly urge the Government of India to intensify diplomatic engagements with the US administration, and to pursue sector-specific exemptions, phase-ins, or relief measures. It is essential to present a united and persuasive case highlighting India’s role in maintaining supply chain resilience, especially for essential textile categories.
India–Japan CEPA: Exploring Untapped Potential
In a parallel and equally promising development, the recent visit of Hon’ble Minister of Textiles Shri Giriraj Singh to Japan (14–17 July 2025) has brought fresh momentum to India’s engagement under the India–Japan CEPA. I had the honour of accompanying the delegation alongside Shri Rohit Kansal, Additional Secretary, Ministry of Textiles.
The interactions during this visit—particularly the 16th India Trend Fair in Tokyo, meetings with Japanese textile CEOs, and engagements with brands like Fast Retailing (UNIQLO), YKK, and Toray Industries—clearly demonstrated that Japanese buyers are actively seeking sustainable, scalable, and high-quality sourcing partners. Japan’s textile imports stand at over USD 30 billion, yet India’s share remains at a modest 1.2%, reflecting significant untapped potential.
Going forward, it is crucial to deepen supply partnerships, improve product innovation and compliance standards, and enhance branding of India-made value-added products, especially in home textiles, made-ups, and functional fabrics.
Thought Leadership: TEXPROCIL Webinar
Recognising the dynamic shifts in global trade, the Council organised an exclusive webinar on “Trade Deals: Navigating India’s Global Negotiations Landscape” on 23rd July 2025. The session was anchored around the seminal book “Strategies in GATT and WTO Negotiations” by Shri Abhijit Das, a veteran trade expert, and was followed by a distinguished panel discussion.
In my opening remarks, I stressed on the need to deep dive into India’s negotiating strategies along with the evolving FTA landscape with its possible implications for Trade and Industry. Moderated by Dr. Siddhartha Rajagopal, Executive Director of the Council, the expert panel included Dr. V. S. Seshadri – Former Ambassador & Senior Fellow, Delhi Policy Group; Mr. J. S. Deepak – Former Indian Ambassador to WTO & Group Director, Bharti Enterprises; and Mr. Ajay Srivastava – Former Indian Trade Services Officer & Founder, Global Trade Research Initiative (GTRI).
With former Ambassadors, senior negotiators, and trade thinkers on the panel, the webinar aptly reflected on the evolution of India's negotiation strategy, including key learnings from past FTAs and current trade dynamics. For our members, the insights shared offered a valuable roadmap to align their operations with emerging trade scenarios, tariff regimes, and regulatory expectations.
Sustainability & Branding: Kasturi Cotton Bharat
On the sustainability front, our national initiative—Kasturi Cotton Bharat—continues to gain momentum. A recent meeting with Materra (UK) explored potential co-branding opportunities for regenerative cotton, signalling growing international interest in India's sustainability narrative.
Domestic demand for Kasturi BCI-compliant yarn has surged, with procurement projections of over 13.78 lakh kgs, particularly from major Indian retailers. This affirms the need to strengthen traceability, certification, and farmer support systems, so that India’s cotton ecosystem can evolve into a globally trusted brand.
Way Forward
As we navigate a complex trade landscape—marked by both breakthroughs and barriers—it is imperative that we remain agile, quality-focused, and sustainability-driven. I encourage our members to seize new market opportunities, invest in technology and design, and build stronger partnerships across the value chain.
The Council remains fully committed to facilitating growth through timely policy advocacy, industry dialogue, and market development. Together, let us strive to enhance India’s leadership in global textiles while safeguarding the interests of our producers, workers, and exporters.
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