Robust export of cotton textiles to China helped India in order to reduce its trade deficit with that country. The current government moves to reimburse all State and Central levies on textile exports boosted shipments to major consuming countries.
Cotton textile exports to China have increased 69 percent between April 2018 and February 2019 to $1.55 billion, contrary to $920 million in the previous year.
Mr KV Srinivasan, Chairman of Cotton Textile Export Promotion Council, said that exports can further increase if the Centre addresses the tariff disadvantage of 3.5-10 percent because the Indian industry suffers vis-a-vis textile exporters in Indonesia, Pakistan, and Vietnam.
He said that high exports of cotton textiles which include fabrics and made-ups — will not only help to reduce the trade imbalance but it also attracts investments from the labor-intensive industries shifting out of China.
China is one of the important trading partners for India with imports of $65 billion and exports of $15 billion in the time period of April 2018 to February 2019. This marks an all-time high in exports and a sharp decline in imports from China. The trade balance between the two countries in fiscal year 2018 was $63 billion in favor of China, and it has shrunken to $50.13 billion.
The Centre had unveiled in January and a new textile policy which includes State-level taxes in the computation of duty drawback. It has also allowed the duty drawback for import of fabrics under Advance Authorization to make exports price more competitive. The Previous month, it extended the refund of State and Central taxes on shipments of apparel and made-up goods.