The UK is a major consumption center of a variety of textile and apparel products from around the world. Its decision to exit from the EU (Brexit) last year sent shock waves throughout the world. It is expected that Brexit will take place by 2019. In the short term, negative implications were predicted in trade in general. In textile and apparel, imports of all categories faced a decline due to pound sterling devaluation. However, the scenario looks optimistic in the longer term.
For India, the UK is one of the key markets for textile and apparel products. Out of India’s total textile and apparel exports to the EU of $9 billion, the UK accounted for about 23% share in 2016 ($2.1 billion).
Presently, around 32% of textile and apparel import demand by the UK is met by the EU 28 countries such as Germany, Italy, France, the Netherlands, Belgium and Spain. Moreover, Turkey, which has a Custom Union with the EU, has a share of 8% in the UK’s textile and apparel imports.
Brexit will provide Indian companies with the opportunity to capture a substantial market share as the playing field will be eventually evened out among all the major exporter nations.
Over the last five years, the total textile and apparel imports by the UK grew at a CAGR of 1% to reach $32 billion, while its exports grew at a CAGR of 2% to touch $12 billion in 2016. The textile and apparel trade balance recorded a deficit of $20 billion in 2016.
Apparel is the largest imported category by the UK, representing 76% of total textile and apparel imports (2016). This is followed by man-made textiles, cotton textiles, and carpets with a share of 9%, 7% and 4% respectively. Top 10 suppliers accounted for 74% of textile and apparel imports by the UK. China is the largest supplier accounting for a 24% share, followed by Bangladesh, Turkey and India with a share of 10%, 8% and 7% respectively.
India’s exports to the UK
India is the fourth largest supplier of textile and apparel products to the UK. At $2.1 billion, India’s share has declined from 6.8% in 2012 to 6.6% in 2016.
Apparel is the largest category with a share of 75% in India’s T&A exports to the UK. This is followed by cotton textiles and man-made textiles having a share of 12% and 5% respectively.
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Presented by Wazir Advisors