Fall In Exports To China Worries Textile Industry

Economy

Fall In Exports To China Worries Textile Industry

The textile industry has urged the Centre to push for negotiations with China to provide duty-free access to Indian cotton textiles. Sanjay Jain, chairman of the Confederation of Indian Textile Industry, said in a release that in 2017-18, India exported textile goods worth US$ 1,362 million to China. But imports from China were to the tune of US$ 2,905 million, indicating a trade deficit of US$ 1,543 million. Between 2010 and 2014, India was a net exporter of textile and apparel products to China. However, after that, India's trade deficit with China was on the rise.

Indian products attract 3.5% (yarn), 10% (fabric), and 14% (made-ups) duty in China, while Vietnam, Cambodia, Pakistan, and Indonesia enjoy duty-free access to the Chinese market. India's cotton yarn exports to China have decreased 53% in the last five years, while Vietnam's exports to China have increased 88%, he said.

The Indian textile industry is sensitive to even small changes and if it had a level-playing field as its competitors, Indian exports to China could double, he added. Jain said that China buys cotton fibre from India but prefers other countries for value added products, such as yarn and fabric. Even recently, when it cut import duty on several products, textiles were not included. "We do not need incentives (from the government). FTAs and bilateral agreements will help exports. Refund of embedded taxes to exporters and trade agreements wherever possible are two policy changes that are needed to boost exports," he said.