UK – India Trade Deal: A Game Changer or Setback for the UK Fashion Industry and Made in UK Sustainability Goals?
23-05-2025
The freshly signed UK-India Free Trade Agreement, hailed as a “landmark” deal by the Department for Business and Trade, is being celebrated as a multi-billion-pound stimulus for the UK economy. With £4.8 billion in expected GDP gains and a significant boost to wages, the agreement promises major opportunities for sectors from whisky to aerospace. However, for the UK fashion industry—particularly those committed to local manufacturing and sustainability—the picture is more complex.
A Flood of Fast Fashion?
One of the key outcomes of the deal is the liberalisation of tariffs on clothing and footwear. While this may lead to cheaper imports and greater variety for British shoppers, it also opens the floodgates to low-cost garments from Indian manufacturers. India, already one of the world’s largest textile producers, offers clothing at prices UK-based manufacturers simply cannot match due to differences in labour and environmental standards.
For Made in the UK brands, this presents a direct competitive threat. Local fashion labels that prioritise British craftsmanship, higher labour standards, and traceable supply chains may now struggle even more to hold market share. The long-standing challenge of competing with lower-cost imports is likely to intensify.
Impact on UK Manufacturing Jobs
The UK fashion sector has been slowly rebuilding its domestic manufacturing base in recent years, with a growing number of brands investing in local production hubs in areas like Leicester, Manchester, and East London. These efforts are not just about nostalgia—they support local employment, reduce supply chain risks, and contribute to the UK’s broader sustainability goals. A surge in cheaper imported garments risks undermining this progress, threatening jobs in UK garment factories that already operate on tight margins.
Sustainability Setback: A Bigger Carbon Footprint
One of the less discussed consequences of the trade deal is its environmental impact. While the government touts the economic gains, there is no mention of how increased reliance on long-haul imports will affect the UK’s carbon footprint. Importing more fashion goods from India—typically transported via air or sea—stands at odds with efforts to reduce emissions across the supply chain.
According to the 2023 Fashion Transparency Index, transportation accounts for a significant portion of a garment’s lifecycle emissions. The move away from locally sourced and produced clothing to more overseas imports could exacerbate the fashion industry’s already poor record on sustainability. The lack of environmental safeguards or incentives for low-carbon logistics within the agreement is a notable omission.
A Race to the Bottom?
With tariffs slashed on 90% of UK exports to India and cheaper imports flooding into Britain, there’s a real risk of a “race to the bottom” for price over principles. Brands that have invested in ethical supply chains, UK-based craftsmanship, and circular economy models may find it harder to compete. Without counterbalancing incentives for sustainable fashion or support for British manufacturing, the deal could end up favouring fast fashion over slow, ethical alternatives.
Strategic Opportunities — If Seized
That said, the deal is not without potential upsides. UK-based luxury and heritage fashion brands could find a lucrative new audience in India, whose growing middle and upper class increasingly covet Western goods. Indian consumers are already significant spenders on British brands, and with reduced tariffs and streamlined customs procedures, market entry is likely to become easier.
However, this opportunity may be reserved for larger brands with the resources to navigate international expansion. Small and medium-sized UK labels focused on ethical production may still face hurdles unless specific support structures are put in place.
FashionCapital / Fashion-Enter CEO Jenny Holloway commented: “Whilst I can see that this is a historic trade agreement with India which is the fastest growing economy in the world today (according to the IMF World Economic Outlook April 25 report), my immediate concern is for the importing of cheap fashion garments into our country. India is known to be a major producer of garments and also known for violation of human working rights too.
“Whilst we absolutely applaud the government on this deal which is expected to increase bilateral trade by £25.5bn we also need to ensure that there is support for the manufacturers within the UK. I was heartened to read that there would be increased copyright protections for the creative sectors for export opportunities however that would last sixty years.
“We must remember that Indian production takes time too! Time to raise POs, confirm garments and seal and then produce, then there’s freight with all the complications of carbon emissions. No Indian factory can compete with proximity sourcing like the UK factories. Retailers need small drops of newness and quality ethical production and that’s exactly what the ATMF will be supporting along side Fashion-Enter’s commitment at the Leicester Made event.”
The UK-India trade deal is a geopolitical and economic milestone, but its potential effects on the UK fashion industry are mixed. While it opens new markets and promises cheaper products for consumers, it may come at the expense of local jobs, sustainability goals, and the future of Made in the UK manufacturing.
To avoid these unintended consequences, policymakers must now consider support mechanisms—such as grants for local textile producers, green logistics infrastructure, and incentives for ethical sourcing—to ensure that the fashion industry grows not just in size, but in ethics and sustainability.
Join us at Leicester Made, Sponsored by Kornit Digital, Alvanon, Style3D and ASBCI, Wednesday 14th May at Athena, Queen Street, Leicester, LE1 1QD
Due to popular demand the ATMF has organised with Leicester Made to have a panel of factories that will be discussing why making in Leicester for the current retailing environment is a MUST for all brands today.
Guest speakers include Sunny Patel from Meesha, Sat Singh Sodhi from Eurorose, Tejas from Shahtex, Mick Cheema from Basic Premier.
On this panel there will also be an announcement of a new report by UKFT that has interviewed a cross section of major retailers that are confirming their commitment to make in the UK with the right factories. This is a major positive way forward for Leicester factories.
