FTA with EU to boost India's textile & apparel exports

12 Jul '12

2 min read

Textile and garment exports from India would benefit immensely from the free trade agreement (FTA) with the European Union (EU), which is expected to be signed by the close of the current year.

Speaking on sidelines of the 55th National Garment Fair, Ms. Kiran Dhingra, Secretary, Ministry of Textiles, said the FTA with the EU would not be just the same as those inked with other countries.

The textiles industry would get a major boost once the new FTA, which is expected to be signed by November or December this year, comes into play, she added.

Around 49 percent of the India’s total textile and apparel exports of US$ 33 billion during last year were destined to the EU.

Presently, EU levies an import duty of 9.6 percent on garments and five percent on other textile items from India, which would end as soon as the FTA is inked.

Mr. Rahul Mehta, President of the Clothing Manufacturers Association of India (CMAI), said the FTA with the EU would bring the price of garments produced in India on par with those manufactured in China and Bangladesh.

At present, apparels produced in India cost around 10-15 percent more than those produced in China and 15-20 percent more than those made in Bangladesh.

Due to its least developed country status, Bangladeshi textiles and apparels enjoy duty-free access to the EU markets, while China benefits from its ability to produce low-priced garments.

Mr. DK Nair, Secretary General of the Confederation of Indian Textile Industries, said at present Indian textile industry loses market to China, but this would change when the new FTA comes into force.

Textile Commissioner, Mr. AB Joshi, said the FTA would help India to competitively price its apparel products to match the prices of China and Bangladesh, particularly when Indian apparels can match the quality of its competitors.

Economic downturn in the EU has caused India’s apparel exports to EU plummet by over 50 percent, during the past few years. Impacted by this, Indian apparel producers are now exploring other markets like West Asia, South America and East Asia, to at least make up for a part of the decline in exports.

Fibre2fashion News Desk - India

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