Indian Textile Minister UPSingh recently accepted an exclusive interview with the media on the impact of India’s FTA negotiations and the Production Link Incentive Scheme (PLI) on the textile industry. The key points are as follows:
(1) FTAs between India, the EU and the UK are expected to bring niches to the Indian textile industry and create a fair competitive environment, especially to compete with products from Bangladesh, Sri Lanka and Vietnam. Countries such as the United Kingdom and the European Union offer tax-free preferential treatment to low-development countries, but Indian textiles bear a 9.5% import tariff. Relatively speaking, India is competitive in the U.S. market, and its market competition is better than that of other trading rivals.
(2) In addition, India’s inverted tariff structure (InvertedDutyStructure) on textiles makes the tariffs on raw materials higher than the tariffs on finished products, thus affecting India’s domestic manufacturing industry. Minister S believes that there is There is a need for correction, but with cotton prices currently at record highs, raising the Goods and Services Tax (GST) across the entire value chain to 12% or 18% is not a solution. The tax rate must be reasonable and should be decided by the GST Council.
(3) India is currently actively negotiating to sign FTAs with foreign countries. The EU and the UK are the main targets, which will boost India’s domestic textile industry. The FTA with the EU will be the most effective. It is beneficial to the Indian textile industry because the EU is one of the largest textile markets. FTA negotiations with the UK are ongoing and are expected to be completed within 6 months. Even if the early harvest agreement is signed, India insists on including textiles.
(4) Sri Lanka is a major textile exporter, but the economic crisis has affected the country’s production. Exporters in the Tirupur area have taken on some transfer orders from Sri Lanka to retain permanent customers and not easy. In addition, the “China Plus One” strategy adopted by Western countries is beneficial to India, as it avoids putting all eggs in one basket and creates market opportunities to replace China. In addition, sustainability issues of global concern, including compliance with labor laws, environmental and pollution regulations, textile mechanization, and container shortages, are all issues that need to be resolved in the textile industry.
(5) Regarding the Production Link Incentive Scheme (PLI), PLI cannot achieve all industrial upgrading and transformation goals, but the government has taken 3 to 4 beneficial measures To increase the competitiveness of the textile industry, coupled with PLI’s promotion of the development of man-made fibers and technical textiles, and the ongoing “National Technical Textile Mission (National Technical Textile Mission)”, the PM-MITRA Textile Park has been established to increase the scale of the industry. Through the central and state governments Export tax rebates and tax exemptions to promote the export of textiles.
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