A major trade deal between India and the UK will go into effect after three years of discussions, opening up an opportunity for British fashion and beauty brands to grow their businesses in India with zero duties on imports.
The India-UK Free Trade Agreement was reached on 6 May between the UK Prime Minister Keir Starmer and Indian Prime Minister Narendra Modi, following talks between the UK s Minister for Business and Trade, Rt Hon Jonathan Reynolds, and the Indian Minister for Commerce and Industry, Shri Piyush Goyal. It comes into play after many stalled starts as both sides look for more agreeable trade partners in light of US President Trump’s global tariffs plan. The deal could increase trade between the two sides by £25.5 billion by 2040, and is expected to boost the UK’s economy by £4.8 billion in the same time frame, according to the United Kingdom’s Department for Business and Trade. The department also reported that India has the highest average tariffs of any G20 economy, with some products facing duties above 100 per cent and an uncertain regulatory environment adding to trade limitations.
“India has been a sleeping giant for UK luxury for too long, and this deal will start to change that,” says Helen Brocklebank, CEO of Walpole, the official body for the British luxury industry, which worked with the UK government on the agreement. “India has a rapidly growing, affluent middle class, a booming UHNWI [ultra-high-net-worth individual] community, and a well-documented love of British luxury brands. Tariffs on British luxury goods have been a huge block for Indian customers looking to buy the products they love.”
According to Euromonitor, India’s affluent consumer segment is expected to grow by 129 per cent by 2030. Its growing middle class is significant, expected to reach a quarter of a billion people by 2050. An April report by Kearney titled “India: The Next Luxury Hotspot?” said that India s luxury market could reach $12 billion by 2028, up from $7.74 billion in 2023.
Indian sectors included under the agreement span textiles and apparel, gems and jewellery, processed foods, leather, and core industrial products such as chemicals, plastics, machinery, and base metals, opening up significant export opportunities across both traditional and emerging categories. While some Walpole members, such as Burberry, have already entered the Indian market, other independent British labels like Emilia Wickstead, Jenny Packham and jewellery house Garrard do not have a significant presence in the market. The new agreement may prompt these brands — and others — to look at India with fresh eyes.
“Zero-duty access is unheard of, and this will be a major boost for the textile industry,” says Sunil Sethi, chairman of the Fashion Design Council of India (FDCI). In the immediate aftermath of the announcement, stock prices of large-scale textile manufacturers like Gokaldas Exports, Arvind, KPR Mill and Kitex Garments rose between 3 per cent and 7 per cent.
Beyond trade
India and the United Kingdom share a deep-rooted textile trade history, dating back centuries. However, this relationship was severely disrupted in the early 19th century when the British government imposed bans on Indian textile imports to protect its domestic mills — crippling India’s once-thriving handloom sector and altering global trade flows.
The cultivation of indigenous cotton crops in India could create a more resilient, ethical and climate-conscious supply chain. But first, they need to be reintroduced to its agriculture.
India’s textile traditions have long drawn luxury houses to its artisans, with brands from Dior to Temperley London engaging Indian embroidery and weaving communities. London-based label SMR Days, which manufactures in India and is stocked at Liberty, Selfridges and Harrods, stands to benefit from clearer, more supportive trade classifications, says Adam Shapiro, co-founder of SMR Days. “That would not only support craftsmen but also help preserve heritage techniques passed down through generations.”
For British independent labels reliant on Indian craftsmanship, tariff clarity matters. As Shapiro notes, “In these tumultuous times, with American tariffs also rising, it’s crucial to ensure that end prices remain in line with how the brand is positioned in the marketplace.”
Indian designers eye the UK market
In 2023, India’s Apparel Export Promotion Council (AEPC), the official body for apparel exporters, reported that exports to the UK reached $1.2 billion, capturing 6.14 per cent of the UK’s textile market. That figure could now double. Many Indian designers, including Anita Dongre, Sabyasachi and Kartik Research, have flagship stores in New York. However, the focus may now shift to London, particularly if the UK economy avoids a recession.
Sethi believes the jewellery sector will also see a significant uptick. As for fashion, he adds: “There were already a few Indian designers looking to open their stores in the UK — this will greatly benefit them. But now I feel Indian fashion designers will look at the United Kingdom more seriously and want to tap that market.”
Kanika Goyal, founder and creative director of KGL, who showed at London Fashion Week for Spring/Summer 2025 but skipped the most recent season, says, “The United Kingdom is a market not performing so well for global designers, but this might encourage Indian designers to look for prospects in this market.”
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