India’s trade deals set to tighten capacity
Anticipated tariff reductions on Indian exports to the United States, alongside newly agreed free trade arrangements with both the EU and the UK, have been tightening export capacity out of India and the impact has been felt in vessel space availability.
However, even before formal confirmation of lower US tariffs, which would have reduced duties from 50% to 18%, Trump’s global tariffs have been struck down. Consequently India and the US have deferred trade talks as they "study the implications" of the US Supreme Court’s decision, announced on the 20th February.
In the absence of a formal executive order the risk of unilateral reversal is always present, which leaves a fragile planning environment for India/US shippers.
Overlaying this is the recently agreed EU–India trade accord, widely regarded as one of the most significant bilateral agreements in recent years. Combined with the UK–India free trade agreement, the effect is likely to be a surge in export demand from multiple major consumer markets at once. As Indian manufacturers respond to improved market access in Europe and the UK, factory output is expected to ramp up, but vessel capacity will not expand at the same pace.
The immediate implication for global shippers is clear: India-origin space is tightening and carriers are likely to test rate increases where demand spikes.
What this means for UK importers
While tighter export capacity may challenge short-term planning, the long-term opportunity for UK businesses is substantial.
The UK imported £21.1 billion in textiles in 2024, with India accounting for £1.25 billion, representing around 6% of total UK textile imports. India ranked fifth among sourcing nations, behind China, Bangladesh, Turkey and Italy.
However, the free trade agreement significantly alters that landscape. Almost all previous tariffs of 8–12% have now been removed, granting duty-free access for most Indian textile and garment products. This immediately improves price competitiveness for UK retailers sourcing from India.
Industry forecasts suggest UK-bound Indian textile exports could grow 30–45%, representing up to £600 million in additional annual trade in the medium term. Government projections indicate the wider UK–India trade deal could generate £25.5 billion in additional bilateral trade by 2040. Indian apparel and home textiles exports to the UK, currently around £1.2 billion, are expected to double over the next five to six years.
If realised, India’s share of UK textile imports could rise significantly, potentially narrowing the gap with Bangladesh’s current 13% share by 2027.
Beyond textiles, streamlined customs procedures and reduced administrative barriers are expected to accelerate transit times and reduce landed costs. For UK retailers and importers, this creates opportunities for margin improvement, diversified sourcing strategies and reduced reliance on single-country supply chains.
A capacity squeeze in the short term
If US tariff relief is confirmed, an immediate rush of orders from American buyers could coincide with growing European demand. This convergence risks overwhelming both factory schedules and vessel allocations in the short term.
The challenge lies in the transition phase. As EU, UK and US buyers simultaneously increase sourcing from India, manufacturing output and export bookings will surge before shipping capacity adjusts.
For UK importers, early planning and secured allocations will be critical. Those able to forecast demand and book capacity proactively are likely to benefit most from the cost advantages created by tariff removal. Those reacting later may face space constraints and rate volatility.
As sourcing patterns shift towards India, securing space will become as important as securing suppliers. Logicall combines global coverage with local expertise, working directly with manufacturers and origin partners to manage vendors, coordinate production readiness and secure reliable allocations.
The Logicall team can also advise on routing options, documentation, compliance and realistic lead times so tariff advantages translate into real commercial benefit. If you are exploring or expanding sourcing from India, speak to Logicall for practical guidance, local insight and capacity protection from the outset.