The proposed Free Trade Agreement (FTA) between the European Union and India, negotiations for which are currently taking place, would boost textiles and garment trade between the two.
Speaking to fibre2fashion, head of International Trade-EURATEX, Ms. Luisa Santos said, “We are looking forward to signing of the FTA with India since the country is a huge market with an important development potential.”
India is the third largest exporter of textile products to the EU, after China and Turkey and fourth largest exporter of garments, behind China, Bangladesh and Turkey. In 2012, the country exported € 2.306 billion worth of textile goods and around € 4 billion worth of apparels to the EU.
However, export of textile and clothing products from the EU to India is low as compared to countries such as the US, Turkey, China, Switzerland, Russia, Japan and Hong Kong. Last Year, the EU exported € 21.78 billion worth of textiles and € 20.27 billion worth of apparels. Out of these, India accounted for only € 324 million worth of textiles and € 53 million worth of garments.
According to Ms. Santos, the access to Indian market is not very easy apart from the fact that EU products that are normally more expensive have to pay high duties and taxes which render them less competitive. “Apart from duty elimination we would welcome increased transparency and simplification of India’s tax system. This would be beneficial both for EU exporters as well as for domestic producers,” she says.
“Moreover, an improved access to Public Procurement markets both at Central as well as at State level is also of key importance for us and we believe that the country should open its economy further to international competition as a way to foster economic growth,” she opines.
Presently, EU levies an import duty of 9.6 percent on garments and five percent on other textile items from India, which would end as soon as the FTA is inked.
When asked about the benefits of FTA, she says, “The benefits of FTA with India for the EU are multiple and we believe that the agreement would also be very beneficial to India that could improve its access to state-of-the-art products and technology at more competitive prices.”
“The EU is the world leader in Technical Textiles and we can provide the best solutions in this field that is so important for other industrial sectors ranging from agriculture to aeronautics,” she explains.
“The existence of an FTA would surely enhance investment flows and technology transfer that for the moment remain relatively low. The increased competition both in India as well as in the EU could be beneficial stimulating innovation, creativity and new business models,” she concludes.
