“While the ongoing trade war between the US and China is perceived as an opportunity for the India’s textile manufacturers to enhance exports to the US, India should tread cautiously, particularly with regard to the Regional Comprehensive Economic Partnership (RCEP) trade with China as half Indiá’s textile and clothing trade is in RCEP with China,” said Sanjay K Jain, Chairman, CITI.
The Confederation of Indian Textile Industry (CITI) has urged the industry to reap the RCEP benefits, while emphasising the need for policy measures to enhance the total merchandise trade among RCEP member- countries. The pact is likely to be inked by the year-end.
RCEP, he pointed out is a gigantic regional bloc in size and scope as it contributes approximately 39 per cent of global GDP and is also home to almost three-and-half billion people. The huge population size makes this region a big market for world trade, including textiles and clothing.
Also read:Indian textile exporters to gain from US-China trade conflict
This proposed comprehensive regional economic integration agreement is among 16 nations (10 member-countries of the ASEAN and six FTA partners of ASEAN — China, Republic of Korea, Japan, Australia, New Zealand, and India).
The RCEP member-countries’ total export of textiles and clothing to the world was $413 billion in 2018, and India’s share among RCEP nations stood at 9 per cent .
India maintains a trade surplus in T&C Sector with all the RCEP member-countries except China. The trade deficit with China was close to $1 billion in T&C in 2018.
At this juncture, India does not have any free trade agreement with two of its biggest trading partners — the US, with which it has the highest trade surplus, and China with which it has the highest trade deficit, the CITI Chairman said.
“India’s trade deficit with China in the T&C sector could widen once RCEP is concluded. This could be detrimental to the domestic textile manufacturers. To reap the RCEP market, industry stakeholders in the textile value chain should gear to make the industry globally competitive,” he said.
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