Faced with a sharp decline in cotton textile export orders, Indian exporters urged the government to speed up the signing of free trade agreements with major importing countries such as the European Union, Australia and Canada to eliminate trade barriers.
Although India’s cotton textiles have a price advantage internationally, countries such as Bangladesh, Cambodia, Pakistan, South Africa, Turkey and Vietnam enjoy preferential tariffs in major importing countries such as the European Union, which offsets this advantage. China and Canada have imposed higher tariffs on Indian cotton textile imports, causing India’s cotton textile exports to face a severe situation.
Since countries such as Bangladesh have free trade agreements with the EU, they often import cotton or yarn from India, process it into textiles domestically, and then export them to developed countries, competing with India’s textile exports. In August 2015, India’s cotton textile exports totaled US$863.18 million, compared with US$932.02 million in the same period last year, a year-on-year decrease of 7.39%. India’s monthly export totals have fallen for nine consecutive months.
“The continuous decline in cotton textile exports has caused us deep concern, and we hope that the government can take effective measures to deal with it.” said RK Dalmia, chairman of the Indian Cotton Textile Export Promotion Association (Texprocil).
Therefore, it is of great significance to accelerate the conclusion of a free trade agreement with the EU, so that India’s competitors no longer have the advantage of import tariffs against the EU, but are on the same starting line as India. India launched negotiations on a free trade agreement with the EU five years ago, but it has not yet officially signed it, and whether the agreement can be reached still faces many uncertainties.
“In addition, the government must also take measures to promote the development of the textile industry itself, such as providing preferential loan interest rates below 3% for textile companies and providing funds for companies to invest in technological innovation and upgrading (TUFS plan). These will increase the growth of India’s textile industry. Short-term competitiveness will also support the continuous decline in exports.” said an industry expert. Indian exporters hope to sign free trade agreement with EU
