Robust export of cotton textiles to China has helped India reduce its trade deficit with that country. The recent government move to reimburse all State and Central levies on textile exports boosted shipments to major consuming countries.

Cotton textile exports to China increased 69 per cent between April 2018 and and February 2019 to $1.55 billion, against $920 million in the previous year period.

KV Srinivasan, Chairman, Cotton Textile Export Promotion Council, said exports can increase further if the Centre addresses the tariff disadvantage of 3.5-10 per cent that the Indian industry suffers vis-a-vis textile exporters in Vietnam, Pakistan and Indonesia.

He added that higher exports of cotton textiles — including fabrics and made-ups — will not only help reduce the trade imbalance but also attract investments from the labour-intensive industries shifting out of China.

China is an important trading partner for India with imports of $65 billion and exports of $15 billion in the period April 2018 to February 2019. This marked an all-time high in exports and a sharp decline in imports from China. The trade balance between the two countries in FY18 was $63 billion in favour of China, which has now shrunk to $50.13 billion.

Textile policy

In January, the Centre had unveiled a new textile policy to include State-level taxes in the computation of duty drawback. It also granted duty drawback for import of fabrics under Advance Authorisation to make exports cost competitive. Last month, it extended the refund of State and Central taxes on shipments of apparels and made-up goods.

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