The new trade agreement between India and America has opened up a big opportunity for the Indian textile industry. After this agreement, America’s $118 billion import market will become more accessible to the Indian textile and apparel sector. The government has described it as an important step towards increasing exports, investment and employment. America is already considered the largest market for India’s textile exports.
According to the Textile Ministry, this agreement will reduce the 18 percent countervailing duty on Indian textile and apparel products. This will provide direct benefit to Indian exporters in terms of price. The ministry says that now India’s position will be stronger than competing countries like Bangladesh, China, Pakistan and Vietnam. Big international buyers can also now give priority to India in their purchasing strategy.
Indian exports will get direct benefits
According to government data, India’s current textile exports to America are about $10.5 billion. About 70 percent of this is apparel and about 15 percent is made-ups. Reduction in duty will make Indian products cheaper and competitive. It is expected that new orders will be received and exports will increase. The industry will get relief on the cost front.
Also read- Tariff reduced, no compromise in agriculture and dairy sector: Piyush Goyal told the outline of India-US trade agreement
The export target of 2030 will get support
The government has set a target of textile export of 100 billion dollars by the year 2030. The ministry says that the new trade agreement will play an important role in achieving this goal. It is estimated that America’s share in total textile exports may be more than one-fifth. This will also distribute market risks and strengthen the export structure.
Apparel, footwear and chemical sectors also get a boost
The benefits of this interim trade agreement will not be limited to the textile sector alone. Labor-intensive sectors like apparel, footwear, plastics, rubber and chemicals will also get relief. The demand for products from these sectors is expected to increase due to reduction in import duty. Industry organizations say that exports had been affected in recent months due to high duties, now the situation may improve.
Benefit of low or zero charges for many sectors
According to Union Minister Piyush Goyal, sectors like textiles, apparel, leather, footwear, organic chemicals, home decor, gems and diamonds, machinery parts and auto parts will also benefit from the agreement with low or zero retaliatory duty. This will increase exports and create new employment opportunities. The government believes that this agreement will give new impetus to the Indian manufacturing and export sector.
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