Textile industry urged to diversify into new markets and products

Keshav Chandra (third right), Joint Secretary, Ministry of Commerce and Industry, and Aditi Das Rout (second right), Trade Advisor, Union Ministry of Textiles, releasing a report at a function held in the city on Friday.   | Photo Credit: M. Periasamy

A majority of India’s textile and clothing exports are to countries with which there are no free trade or preferential trade agreements, said Aditi Das Rout, Trade Advisor, Ministry of Textiles.

At a meeting organised here on Friday by the Indian Texpreneurs’ Federation, Ms. Rout said India’s textile and clothing exports are almost stagnant for the last five years. The top destinations for the textile and clothing exports from the country are the US and the European Union. Substantial exports are also to emerging markets such as the UAE, Bangladesh, and China. Nearly 63 % of the exports are to markets where there are no free trade agreements, she said.

India has 10 Free Trade Agreements and six Preferential Trade Agreements. “We need to analyse why our trade has not performed despite the agreements,” she said. Such agreements look at various issues and compliances that prove expensive for the small and medium-scale businesses. The textile and clothing industry is largely fragmented and is with SMEs. Ms. Rout urged the industry to diversify into new markets and products, using branding as an effective tool, and invest to achieve economies of scale.

The Ministry of Textiles plans to handhold SMEs with trend forecasting services and have display locations and warehouses in potential and emerging markets. This is to give the exports more visibility, she said.

Keshav Chandra, Joint Secretary in the Union Ministry of Commerce, said the Government is working on a National Trade Portal. The first module of the portal is expected to be up and running from August-September next year. The portal will have four dimensions - logistics, online certification systems, financial systems, and compliances.

The textile and clothing exporters are struggling to compete with countries such as Vietnam and Bangladesh. There is lack of nimbleness in the industry and Government.

“We are not fast enough to see what the next option is,” he said. The official suggested having a focused group for each country and study the export-import trends and issues.

The Indian Texpreneurs Federation presented a report on “Competition Analysis and Way Forward for FTAs for Indian Textile Sector”. The report says India faces competition from Pakistan mainly because Pakistan receives zero duty market access in EU. In general, the country’s textile and clothing exports have tariff disadvantage ranging from 1 % to 40 %.

The way forward is to seek better market access under current FTA negotiations and have mutual recognition agreements with major export markets to combat impact of non-tariff barriers.

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Printable version | Sep 23, 2021 9:07:40 PM |

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