Home / Knowledge / News / Textiles / EU-India FTA will create level-playing field
EU-India FTA will create level-playing field
22
Aug '12
A Free Trade Agreement (FTA) between India and the European Union is in the offing. This could prove to be a big morale booster for the Indian textile and apparel industry and help boost exports. But can it help under the backdrop of the European debt crisis.

“We are looking at the long term and not the short term. Right now Indian exporters are out-priced by countries like Bangladesh. But once the FTA is signed, Indian textile exporters will have a level playing field”, says Mr Ajay Sahai, Director General of the Federation of Indian Exporters Organisation (FIEO).

He adds, “Indian textiles and garments are competitively priced and since the Indian industry is larger in size than in say Bangladesh, Cambodia or Vietnam, we can hope to garner additional market share in the European Union on our inherent strengths”

Mr Sahai informs, “Even if there is an overall drop of 10 percent in imports of textiles and clothing by the European Union, there is still the rest, which India can hope to capture on the strength of the FTA even in the short term”.

Two regions – US and EU account for a majority chunk of Indian exports of textiles and clothing. The EU has granted duty-free access to Bangladeshi goods, since it is a least developed country (LDC). This makes textile and apparel exports from countries like India uncompetitive, due to the 16 percent tariff imposed by the EU.

Japan too has granted the same status to Bangladesh and has signed FTA’s with other textile and garment exporting countries like Vietnam, Thailand and Indonesia. Though current exports from the sector to Japan are negligible, a market dominated by Chinese textiles and garments, the FTA could pave the pay for hiking the figures.

The EU imports around $174.7 billion worth clothing, of which, share of India is a mere four percent at $7.4 billion. India’s share in the US apparel import basket is just four percent or $3.3 billion of the almost $77.7 billion garments that it imports and that to Japan is a mere 0.9 percent compared to above 80 percent share of China.

When quizzed about increasing exports to non-traditional markets like Russia, Latin America, ASEAN, Africa, Japan etc, he said, “Diversifying exports is a not something that can be done overnight. Even if there are incentives, exporters first study markets and then step in after making proper assessments.

“It is too early to conclude if incentives for exports to these regions have helped. But data reveals that shipments to Russia, Japan, Israel, etc have risen. But incentives will definitely help in hiking exports to non-traditional markets as we cannot depend only on traditional markets”, he concluded by saying. 

Fibre2fashion News Desk - India

Must ReadView All

Textiles | On 25th Mar 2017

GST to positively impact retail value chain: CBRE

The implementation of the Goods and Services Tax (GST) bill in India...

Textiles | On 25th Mar 2017

MEGlobal to build first ever US MEG plant

Monoethylene glycol (MEG) producer MEGlobal plans to construct a new...

Courtesy: Ulster Carpet

Textiles | On 25th Mar 2017

Ulster Carpets acquires Griffith Textile Machines

Northern Ireland based manufacturer of carpets, Ulster Carpets said...

Interviews View All

Rahuul Jashnani
Jashn

‘Online economy has changed the whole dynamics of buying habits.’

Angelina Francesca Cheang
MY ANJE

'Consumers in the age-group 21 to 38 are driving the activewear trend'

Smarth Bansal
Colorjet India Limited

We would like to venture more companies into the Indian market

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

Robert Brunner
Devereux

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
March 2017

March 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


eNEWS
Insights
Subscribe today and get the latest News update in your mail box.
Advanced Search