Buyers are intensifying factory audits and evaluations in hubs such as Tiruppur in Tamil Nadu, with plans to start or expand sourcing from India amid supply-chain uncertainties in Bangladesh and in anticipation of lower tariffs under the FTAs, said exporters.
“Brands such as M&S, C&A, Primark, Mothercare, Next and Duns have started visiting Tiruppur for technical audits, evaluation of new factories and to explore the possibility of increasing sourcing from their existing suppliers,” Tiruppur Exporters Association president KM Subramanian said. “Brands that are already sourcing from India are actively looking to scale up their buying.”
The India-UK FTA proposes the removal of tariffs on 99% of India’s exports to the UK. The agreement will come into force only after it is ratified by the UK’s Parliament, expected to be completed in the next few months.
Of India’s $37 billion textile and apparel exports in 2024-25, the US accounted for the largest share at 28.5%, followed by the EU at 19.6%. The UK was the fifth-largest export destination, with 5.4% of the total exports.
Bangladesh’s current political situation has also prompted European buyers to reconsider sourcing strategies and consider imports from India.
“Buyers such as C&A, which source large volumes of jeans and bottoms from Bangladesh, are exploring the possibility of shifting part of their sourcing to India. Some UK buyers have also indicated their willingness to move production from Bangladesh to India,” said Vijay Agarwal, chairman of the Cotton Textiles Export Promotion Council.At present, import duties make sourcing from India more expensive compared with Bangladesh.
Bangladesh has enjoyed duty-free access to the European market for nearly 25 years. In contrast, Indian apparel and textiles currently attract duties of 12.5% and 9.6%, respectively, in both the EU and the UK.
Implementation of the FTAs with the EU and UK would scrap duties on Indian textiles and apparel, placing India at par with Bangladesh.
Despite having well-established supply chains spanning over a decade, European buyers are increasingly keen on reducing concentration risk, exporters said. “Even if Bangladesh stabilises, buyers will not want to put all their eggs in one basket,” Agarwal said.
Industry players also see a need to expand capacity in anticipation of higher demand from these markets.
“If the geopolitical situation in Bangladesh remains uncertain and FTAs with both the UK and the EU are signed, India could face a capacity shortfall,” Agarwal said.