To ensure adequate utilisation of the free trade agreements (FTAs) being negotiated by India with partner countries, including the one with Australia already under implementation, the Textiles Ministry is reaching out to export promotion councils and other industry bodies to help spread awareness about the new opportunities, according to officials.

“Indian garments and textiles products face tariffs as high as 10-15 per cent in markets such as Australia, UK, Canada and the EU. India’s FTA with Australia is already under implementation while ones with the UK, the EU and Canada are likely to be finalised soon. So, the tariff walls will now start getting dismantled. The Textiles Ministry is trying to devise ways to ensure that these get adequately utilised,” an official told businessline.

While share of India’s textiles exports to Australia is just about 5 per cent, it is expected to rise soon with free movement of textiles and apparels to the country at zero per cent duty under the FTA, according to the Confederation of Indian Textile Industry (CITI).

Capacity utilisation

Australia is the largest importer of garments in the Southern hemisphere and increased garment exports to the country can help in better capacity utilisation in the sector as the seasonal nature of the exports would get addressed, explained T Rajkumar, Chairman, CITI, in a recent statement.

Indian garment exporters, at present, have to suffer four-five months of lean period during the winter season in the western markets when there is no demand for summer clothes.

“It is important to spread awareness amongst exporters of the advantages of the FTAs and also explain to them the processes through which it could be utilised. The export promotion councils and industry bodies can play an important role in doing so and hence the Textile Ministry is roping them in,” the official said.

India’s utlisation of FTAs it signed and implemented in the past with partners such as ASEAN, South Korea and Japan has been low and policy makers are now trying to focus on how this could be improved.

Zero duty access

Under the India-Australia FTA, which got implemented from December 29, 2022, Australia is offering zero-duty access to India for about 96.4 per cent of exports (by value) from day one. The two countries hope to double bilateral trade to $45-50 billion in around five years.

India’s FTAs with the UK are in an advanced stage of negotiation and expected to be finalised this year. Three rounds of negotiations have taken place for the proposed India-EU FTA while talks with Canada are also progressing simultaneously.

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