The Indian textile industry is very eager to see a Free Trade Agreement (FTA) in place with the United Kingdom. The industry expects that it will be able to better compete with neighbouring Bangladesh once there is duty-free access to the large garment market. Both India and the UK have indicated that they are working for an early conclusion of FTA negotiations.
Last month, Indian commerce and industry minister Piyush Goyal and UK secretary of state for international trade Kemi Badenoch met for the sixth round of FTA negotiations after a gap of more than four months. They directed their negotiators to not to stick with sensitive issues but iron out the differences and move ahead.
“The proposed trade deal with the UK is very important for Indian industry as UK is a large market and Indian textile industry will have duty-free access to the important market. It will provide much needed boost to the industry,” Sanjay Jain, managing director of TT Limited and former chairman of the Confederation of Indian Textile Industries (CITI), told Fibre2Fashion. He expects the trade deal to get signed in the first half of 2023.
Indian industry expects the FTA to provide a level-playing field with Bangladesh, which has duty-free access to the UK due to preferential treatment on the basis of its Least Developed Country (LDC) status. Currently, Indian apparel exports to the UK attract around 10 per cent duty.
K Vel Krishna, managing partner of Deiveegam Dyers, had said during a session of CII’s Texcon conference held recently in New Delhi, “Proposed FTA with the UK is expected to be landmark development as it can provide better edge to Indian exporters. They will be able to offer competitive prices to UK’s buyers. They will also get duty-free access to the market similar to Bangladeshi exporters.”
Raja M Shanmugham, former president of Tiruppur Exporters’ Association (TEA), told Fibre2Fashion, “FTAs are very important trade arrangements between the trading countries in this era of universal market. The proposed trade deal with UK is important because it will open large consuming market further. It would also be followed with similar trade arrangement with Europe.” He said that speedy completion of FTA negotiations with all the prospective trading countries would help the Indian economy too.
K Selvaraju, secretary general of South Indian Mills Association (SIMA), told Fibre2Fashion, “The proposed trade deal with the UK is expected to open doors to an important market. Indian textile sector, more specifically the garment industry, will get a boost as Indian exporters will be able to export there without duty. However, Indian government needs to ensure raw material security. Currently, Indian cotton is costlier than ICE cotton which is paralysing competitiveness of Indian exporters.”
As per trade data, India is the fifth largest garment supplier to the UK, while Bangladesh is the second. According to Fibre2Fashion’s market insight tool TexPro, UK had imported garments worth $20.889 billion during 2021. With garment supply of $3.019 billion, Bangladesh accounted for 14.45 per cent in UK’s total apparel imports. China’s share was 21.57 per cent. Turkiye and Italy also had a share greater than India’s 5.24 per cent ($1.094 billion) in 2021. Once the FTA is in place, India can expect to improve its share in the UK market.
This article is republished from Fibre2Fashion under a Creative Commons licence. Read the original article.