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CII urges govt to pursue FTAs to protect textiles sector
16
Oct '15
The Indian government must aggressively enter into as many Free Trade Agreements (FTAs) as possible with select textile markets in Asia and the European Union to safeguard Indian textile and apparel industry to neutralize the negative impact of the recently negotiated 12-nation Trans-Pacific Partnership (TPP), according to a report on How to enable “Make in India Possible in Textile and Apparel sector”. The report was released by Confederation of Indian Industry (CII) and management consulting firm Wazir Advisors at the CII Texcon 2015 in New Delhi on Thursday.

“The TPP is a trade agreement that will open markets, and enable countries like Vietnam a zero-duty access to the US market for textiles, while Indian players will have to pay 14-32 per cent duties, which will make them uncompetitive. It would have been much better had India too joined the TPP”, the CII Wazir report highlighted.

“The TPP will adversely impact the Indian textiles industry because of the yarn forward provision which requires the yarn and fabric used in final product to be manufactured in one of the free trade partners to qualify for duty-free treatment under the trade pact. At present, India exports yarn and fabric to Vietnam which then exports the finished products to countries like the US. Now, with the yarn forward provision in the TPP, they will have to either source it from some other free partner country or produce domestically, hurting India's exports adversely”, said Sachit Jain, Vice Chairman, CII National Committee on Textiles and Executive Director Vardhman Textiles Ltd.

“India should take all possible steps to join the APEC forum, which accounts for nearly 60 per cent of global GDP. This would provide a pathway for greater integration into the region's economy”, he added.

“India is quite competitive in textile and with massive costs increases in China, Indonesia, Thailand, Philipinnes in labour and power we have a historic opportunity to build a thriving textile industry and be a catalyst for job creation. One crore invested in textiles leads to 70 direct jobs and 5 Crore of Revenue. Hence it can be the cornerstone of the new government's policy of increasing share of manufacturing in GDP to 25 per cent and be the key driver of Make in India. It is however important that India eases the labour laws and creates an enabling infrastructure”, highlighted Prashant Agarwal, Joint Managing Director, Wazir Advisors Pvt. Ltd.

The report also highlighted that “Owing to rising costs in China by three times in the last 7 years, India can easily tap a major chunk from China which holds 40 per cent of world's total textile and apparel market share. India can increase its share in Apparel from $60 billion to $200 billion out of a total global market size of $800 billion by 2025. But India will have to reduce the finance cost and ease the land and environment clearances, focus on economies of scale, infrastructure, skill development, technology development and brand promotion”. (SH)

Fibre2Fashion News Desk – India

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