Indian Textile Stocks Jump on UK Tariff Hopes!
Gokaldas Exports, KPR Mill, and Arvind Ltd lead the rally as investor optimism soars over prospects of duty-free textile exports to the UK, improving India’s competitiveness against key Asian rivals.
Summary:
Shares of Indian textile companies surged on Monday, with Gokaldas Exports soaring 18.8%, KPR Mill jumping 10.1%, and Arvind Ltd rising 5.8% as markets cheered growing optimism around a potential zero-tariff trade arrangement with the UK. The proposed duty-free access is expected to significantly boost Indian textile exports, reduce cost barriers, and improve India’s edge over competitors like Bangladesh and Vietnam.
Textile Stocks Rally as Duty-Free Hopes Fuel Optimism
The Indian stock market witnessed a remarkable surge in textile sector stocks, led by Gokaldas Exports, KPR Mill, and Arvind Ltd, following renewed optimism about India gaining zero-duty access to the UK market. As trade talks between India and the United Kingdom gain momentum under the proposed Free Trade Agreement (FTA), investors anticipate a transformational boost to India’s textile and apparel exports.
On the Bombay Stock Exchange (BSE), Gokaldas Exports’ stock jumped 18.8% to close at ₹1,013, marking its 52-week high. KPR Mill experienced a gain of 10.1%, finishing the day at ₹1,122.05, whereas Arvind Ltd rose by 5.8%, reaching ₹387. Other textile players such as Raymond, Welspun India, and Trident also registered between 2% and 6% healthy gains.
FTA Talks with UK: A Potential Game-Changer
The rally is rooted in market expectations that India may soon secure zero-tariff access to the UK for its textile exports under the ongoing India-UK Free Trade Agreement. The move is widely seen as a game-changer for the Indian apparel and textile industry, which currently faces a 9–12% import duty on shipments to the UK.
When the Free Trade Agreement (FTA) is implemented, it will remove these tariffs, allowing Indian textile products to be more competitively priced than those from countries like Bangladesh, Vietnam, and Cambodia. These countries benefit from preferential access to the UK through various trade agreements, such as the Generalised Scheme of Preferences (GSP).
UK Export Opportunities Expected to Skyrocket
The UK is one of India’s top five textile export destinations, accounting for an estimated ₹8,000–₹10,000 crore in annual shipments. With duty-free access, experts estimate that Indian textile exports to the UK could grow by 25–30% annually, creating new employment opportunities and unlocking production capacity across regions like Tiruppur, Surat, and Ludhiana.
Trade policy analyst Anupam Kumar said, “The UK FTA could be the most impactful trade deal for India’s textile sector in the last decade. It paves the way for larger orders from retailers in the UK and lets us compete on equal footing with Bangladesh and Vietnam.”
Gokaldas Exports: Leading from the Front
Gokaldas Exports, a prominent garment manufacturer for international brands like GAP, H&M, and Zara, has emerged as the leading gainer. The company has seen consistent order inflows from European and North American clients. Given its strong compliance framework and diversified product portfolio, it can leverage the FTA advantage well.
Analysts at ICICI Securities upgraded their target price for Gokaldas, citing “potential topline expansion of ₹500–₹600 crore annually if FY26 ratifies the UK FTA.” The company is also expanding capacity at its Karnataka facilities, signaling readiness for higher export volumes.
KPR Mill and Arvind: Textile Giants Positioned for Expansion
KPR Mill, known for its vertically integrated textile and garment operations, benefits immensely from the tariff waiver due to its scale and cost efficiency. The company has increased its focus on sustainable and value-added fabrics, which are in high demand in the UK and EU markets.
Arvind Ltd, another stalwart in the textile and fashion space, is looking to diversify its export portfolio further into high-margin categories. Analysts believe Arvind could see margin expansion by 150–200 basis points due to reduced tariff costs and higher-order visibility.
Comparative Edge over Regional Competitors
While India has long battled cost pressures and trade barriers compared to peers like Bangladesh and Vietnam, the potential FTA with the UK could narrow the competitive gap. Bangladesh enjoys duty-free access through its Least Developed Country (LDC) status. At the same time, Vietnam benefits from an FTA with the UK under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
With India’s FTA, exporters will gain a similar advantage without compromising on quality or delivery standards, thus enhancing the “Make in India” narrative and creating scope for higher foreign exchange earnings.
Industry Reaction and Policy Outlook
The Confederation of Indian Textile Industry (CITI) welcomed the development, stating that the FTA will give the Indian textile sector a “much-needed shot in the arm” amid global demand volatility. Exporters have also urged the government to fast-track infrastructure incentives like the PM MITRA scheme and PLI (Production Linked Incentive) benefits to complement the anticipated FTA gains.
On the government’s side, Commerce and Industry Minister Piyush Goyal recently hinted at “substantial progress” in India’s bilateral trade negotiations with the UK, with the FTA likely to be finalized in the coming months.
Conclusion: A Tailwind for India’s Textile Revival
The euphoria in textile stocks is more than just speculative—it reflects growing confidence in India’s resurgence as a global textile hub. With duty-free access to one of the world’s largest fashion markets on the horizon, Indian manufacturers are poised to increase market share, boost production, and raise profitability.
While the final implementation timelines of the UK-India FTA remain to be confirmed, the momentum has already catalyzed investor confidence in textile equities. The industry now looks toward a high-growth phase backed by structural policy support, export tailwinds, and rising global demand.
The image added is for representation purposes only
