Partial protection for the Indian textile exporters would come from the adherence to the “yarn-forward” rule in the pact. Textile and garments produced from yarn/fabric made by a TPP nation will qualify for duty-free status. Lack of sufficient capacities of yarn/fabric may however constrain member countries. This could also trigger Indian and Chinese textile companies to set up backward integration facilities in TPP countries such as Vietnam. The build-up of capacities may happen gradually and in the short-term market share of Indian exporters is likely to decline.
The double whammy for India will come in case these countries set up their own backward integration facilities into yarn and fabric, which will hurt India's exports of yarn and fabric to these countries, and bring down India's share in textile exports, the report said. (SH)
Fibre2Fashion News Desk – India
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