India-UK FTA Set To Challenge Bangladesh And Pakistan In UK Market

The implementation of the India-UK Free Trade Agreement (FTA) from July 15 is expected to reshape trade dynamics in South Asia, with Bangladesh and Pakistan emerging as two of the countries most vulnerable to losing market share in the British market. Analysts say the deal could significantly strengthen India's competitiveness in key labour-intensive sectors such as textiles, apparel, footwear and leather products, areas where Bangladesh and Pakistan have traditionally enjoyed an edge.

The landmark agreement between India and the United Kingdom is projected to increase bilateral trade by £25.5 billion in the long term while providing extensive tariff reductions across a wide range of goods. Under the pact, the UK will lower or eliminate duties on several Indian exports, including clothing and footwear, making Indian products more attractive to British importers.

Industry leaders believe the most immediate impact will be felt in the apparel sector. According to textile exporters, Indian manufacturers have long faced a tariff disadvantage compared with competitors such as Bangladesh. The FTA removes much of that handicap, helping Indian firms compete more aggressively on price and scale in the UK market. Experts expect the agreement to attract fresh investment into India's textile industry and generate employment as export orders shift toward Indian suppliers.

The development comes at a time when India is expanding its network of trade agreements with major global economies. Recent assessments of India's trade strategy suggest that preferential market access in developed markets could narrow the competitive advantage previously enjoyed by Bangladesh and Pakistan in sectors such as textiles, garments and footwear.

Bangladesh, one of the world's largest garment exporters, relies heavily on preferential access and low-cost manufacturing to maintain its position in the UK market. Pakistan also has a significant export presence in textiles and apparel.

Beyond textiles, the agreement is expected to strengthen India's position in engineering goods, footwear, chemicals and other export-oriented sectors. The deal recently overcame concerns related to UK steel safeguards, with India securing protections for most of its steel exports, clearing the way for implementation next month.

While Bangladesh and Pakistan are unlikely to lose their export markets overnight, economists say the India-UK FTA marks a significant shift in South Asia's competitive landscape and could gradually redraw trade flows in one of the world's most important consumer markets.