Garment exports from India to Australia are likely to see a jump of 30 per cent in the coming year as a result of the India-Australia FTA (free trade agreement), says industry body.

As the India-Australia FTA kicked off on December 29, 2022, various Indian products, including textiles and apparel, will have preferential market access to the Australian market with zero customs duty.

“We are witnessing more order flow from Australia and expect the garment exports to see an increase of about 30 per cent this year,” KM Subramanian, President, Tiruppur Exporters’ Association (TEA), told businessline.

It is gathered that garment exports from India to Australia stood at about ₹900 crore in 2021, and the same is expected to have grown to about ₹1,200 crore in 2022, with the Tiruppur region accounting for about 60 per cent of these exports to Australia.

However, overall textile and apparel exports from India to Australia were estimated at $392 million in 2020–21. India’s 70 per cent of textile products and 90 per cent of apparel products faced duty on export to Australia. With the elimination of duty under the FTA, India’s exports of textiles and apparel are expected to grow from $392 million to $1,100 million in the next 3 years, according to estimates.

Level playing field

“Australia’s zero import duty access to India (earlier 5 per cent) would likely level the playing field for the Indian textile industry with other countries like Bangladesh, China, and Vietnam,” said Sahil Udani, Assistant Vice President and Sector Head for Corporate ratings at ICRA.

In FY22 and during the first 7-month period of FY23, Australia accounted for about 2 per cent of India’s apparel exports, compared to about 1 per cent in FY15. Going forward, the share is expected to increase further on account of the added advantages of the India-Australia FTA.

“Further, with the increased focus on China plus one vendor strategy, the FTA should aid in reducing Australia’s dependence on China (one of the key exporting nations to Australia),” added Udani.

The Australian market presents good potential for Indian exports of home textiles like bed and bath linen, toilet and kitchen linen, curtains, pillow covers, quilts and comforters, cotton bags, and ready-made garments, as well as carpets and flooring.

India has so far signed 13 free trade agreements (FTAs), including the recently concluded CEPA (Comprehensive Economic Partnership Agreement) with the UAE and the ECTA (Economic Cooperation and Trade Agreement) with Australia, and six preferential trade agreements (PTAs) with various trading partners.

The Indian Government is also engaged in negotiations for an FTA with countries such as the United Kingdom, the European Union, and Canada for enhancing market access to Indian products, including textiles.

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