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Key Points

The Exim Bank report reveals ASEAN nations are blocking Indian textile exports through exclusion lists, despite the AITIGA trade deal. India's textile sector is a key economic driver, contributing 8% to merchandise exports. The government’s PLI scheme aims to enhance competitiveness in man-made fibres. With India ranking second in global cotton production, fairer ASEAN trade terms could significantly boost exports.

Key Points: India Textile Sector Demands Fair ASEAN Trade Terms in Exim Bank Report

  • ASEAN countries restrict Indian textiles via exclusion lists
  • India's textile sector contributes 1.4% to GDP
  • PLI scheme boosts man-made fibre competitiveness
  • India ranks second globally in cotton production
2 min read

India's textile sector needs fair deal from ASEAN countries: Exim Bank Report

Exim Bank report highlights India's textile trade challenges with ASEAN nations, urging renegotiation of AITIGA for better market access and competitiveness.

"India must push for better access to 'offensive' products while protecting local industries with higher tariffs on 'defensive' goods. – Exim Bank Report"

New Delhi, June 30

India's trade with its top ASEAN partners like Indonesia, Thailand, and Malaysia has grown a lot, even though India has taken a protectionist approach after signing the ASEAN-India Free Trade Agreement (AITIGA). But Indian exporters, especially in the textile sector, are still facing major challenges.

A report by India-Exim Bank noted that a large number of Indian textile products have been put on "exclusion" or "sensitive" lists by ASEAN countries.

This means they don't get duty-free access, making it harder for Indian textiles to compete in those markets. Countries like the Philippines and Vietnam also offer zero-duty access under AITIGA, but Indian businesses are not using this opportunity fully.

The study suggests that the trade agreement needs to be re-examined and renegotiated. Many products that India is strong in exporting are blocked or restricted by ASEAN countries. These are called "offensive" products, and India should push for better access to them.

At the same time, there are "defensive" products where India should keep higher tariffs to protect local industries and reduce the trade gap.

The textile and garment industry is very important for India's economy. It makes up over 10 per cent of India's manufacturing output and 1.4 per cent of the total GDP. In 2023-24, textile exports were worth USD 34.4 billion, or nearly 8 per cent of India's total merchandise exports.

To boost the growth of man-made fibres, the Government of India has launched a special support plan called the Production Linked Incentive (PLI) scheme.

This scheme is focused on the Man-Made Fibres (MMF) and Technical Textiles sectors. It aims to attract investment, encourage local manufacturing, and make Indian products more competitive in global markets. So far, 73 companies have been chosen to benefit from this scheme.

India is already one of the world's top producers of textiles. It ranks second in cotton production after China. In the 2023 market year, China made up over 24 per cent of the world's cotton output, while India followed closely with 23 per cent. Other major producers include Brazil (13 per cent), the USA (11 per cent), and Pakistan (6 per cent).

India contributes about 4.7 per cent to global textile production and is a major player in cotton, silk, raw jute, and man-made fibres. These products are used both in India and exported to other countries.

- ANI

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Reader Comments

S
Shreya B
The PLI scheme is a good step but we need more focus on quality improvement. Many ASEAN countries prefer Chinese textiles because of better finishing and consistency. Our manufacturers should upgrade technology to compete globally.
A
Aman W
Textile sector employs millions of Indians, especially women in rural areas. If ASEAN countries are blocking our products, we should also review what concessions we're giving them. Tit for tat policy needed!
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Priyanka N
Why aren't Indian businesses using the zero-duty access in Philippines and Vietnam? Government should organize more trade fairs and B2B meetings to create awareness about these opportunities.
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Karthik V
We need to move beyond cotton and focus more on man-made fibers. The future is in technical textiles and sustainable fabrics. PLI scheme is good but implementation speed needs to improve.
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Nisha Z
While negotiating with ASEAN, we must protect our handloom and khadi sectors too. These are our cultural heritage and provide livelihood to many artisans. Globalization shouldn't destroy traditional industries.

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