Indian textile exports, especially apparels and denim, may be hit with the signing of largest free trade agreements, the Trans Pacific Partnership (TPP) which the United States is in advanced stage of signing with 11 countires, including Japan, Australia, Vietnam, Singapore and Cananda to enhance trade and investment among the TPP-member countries.
TPP is the initiative of the US with an aim to protect its domestic industry by gaining duty-free access to markets. The negotiations to enter into TPP began in 2005 and are reaching final stages in 2015. As per a report by IndiaNivesh Securities Private Limited, Asia Pacific is an important zone with respect to trade and all non-member countries are likely to be impacted by TPP.
Quoting industry experts from Textile Export Promotion Council and Wazir Advisors, the India Nivesh Securities Private Limited report said that India, along with other textile-producing countries like China, Pakistan, Bangladesh and Sri Lanka, is likely to be negatively impacted from TPP. Due to duty-free access to Vietnam exports, competitiveness of India can be impacted to a great extent.
India has become an isolated country and such a country can’t flourish. All such isolated countries don’t get free trade benefit. Now, in this TPP, one country will manufacture fibre and another garment all under one pact and no customs duty will be charged. Vietnam’s growth is phenomenal and is still one of the lowest wage countries will make it quite competitive. India will have a clear disadvantage, especially in exports of commodities like T-shirts, men’s wear, denim, pullovers and sweaters, among other things, a senior AEPC official said.
