After signing the Free trade agreement with Australia that became effective on January 1 the Indian commerce gurus are pinning high hopes on textiles to achieve the targets of bilateral trade agreed upon with Australia.
In the first ten months of 2022, India exported apparel and textiles worth $471.94 million out of which apparel exports were 254.26 million and home textiles 217.68 million. During the same period, India imported cotton worth $255.59 million. The total bilateral trade in textiles in the first 10 months of 2022 clocked $727million
Indian textile entrepreneurs and their government expect much-improved performance in this sector after being granted duty-free access to the Australian market. The current bilateral trade with Australia is less than $ 1 billion in the textile sector. The industry leaders in India said that the actual benefit of the FTA would be visible by the end of the first quarter of 2023. They said that after zero duty concession, they would be disappointed if the textile exports to Australia are not doubled.
India needs long-staple Australian cotton for its value-added export products and currently buys 18-19 percent of its import requirements of $1.2-1.4 billion annual cotton imports. Currently, Indian apparel exports account for only 1.81 percent of its total apparel exports. The share of home textile exports is almost double at 3.35 percent of the total.
With a waiver of 10 percent import duty on Indian apparel and textiles the Indians are hopeful of gradually grabbing lion’s share in the Australian mark but market pundits say that the entrenched players in the Australian market would not allow the market to slip from their hands. Some of these economies were already enjoying zero-rate facilities. They probably made extra bucks by keeping their prices a little higher in wake of a 10 percent duty advantage over Indians. They would now adjust their offerings at lower rates.
