Mumbai: Shares of textile companies and garment makers surged Wednesday on expectations the bilateral trade deal with the UK will help expand the shelf presence of Indian brands in British retail outlets that currently source significantly more from low-cost producers such as Bangladesh.
The landmark Free Trade Agreement (FTA) eliminates existing tariffs on textile trade between the two countries. As per an Elara Capital report, textiles and apparel trade is at $1.42 billion, with India exporting nearly the entire quantum.
Shares of were the top gainer on BSE, up 12%, followed by and up 4.7% to 11.7% at close. The BSE 500 index was up 0.5% on Wednesday.
“The India-UK FTA removes 8-12% tariffs on Indian textiles, making exports to the UK cheaper and more competitive,” said T Manish, research analyst at Samco Securities. “This gives Indian exporters a clear cost advantage over rivals such as Bangladesh and Vietnam, potentially boosting margins or enabling price cuts to gain market share.”