India Australia ECTA – An impetus for the Textile Industry 

New Delhi Thursday, December 29, 2022: The India-Australia FTA, signed on April 2, would come into force from Dec 29, 2022. Under the pact, Australia is offering zero-duty access to India for about 96.4% of exports (by value) from day one and is likely to double the bilateral commerce to $45-50 billion in around five years.

Shri T Rajkumar, Chairman CITI, is hopeful that the Ind- Aus ECTA will help boost textile and apparel exports as the FTA is slated to provide a big relief to Indian textile exporters who had to pay about 10% customs duty in countries like Australia, Canada, and the UK.

Quoting that India’s ready-made garment exports to Australia have seen a growth of an average of 11.84% over the last 5 years, Mr. Rajkumar opined that going by this growth trend and with the agreement coming into play, exports may grow immensely in the coming times.

Elaborating on the India – Australia strategic partnership, Mr. Rajkumar commented that although currently, the share of India’s Textile Exports is only around 5% once the pact is enforced, free movement of T&A goods on zero percent duty would help exporters increase their shipments in the country. Customs duty advantage under the India-Australia free trade agreement will help Indian apparel exporters get greater market access in that country as compared to their competitors.

Mr. Rajkumar remarked that Australia is the largest importer of garments in the Southern Hemisphere, and holds immense potential for Indian Textile and apparel exporters. Garment exports to Australia can help in better capacity utilization in the garment sector as the seasonal nature of the garment exports gets addressed.  The present dominance of the western markets in garment exports has so far resulted in 4-5 months of the lean period when there was no market for the summer clothes that the Indian export basket largely consists of.

lt has highlighted that labor-intensive sectors such as textiles and apparel are likely to benefit the most from the agreement. The pact would also enable the sector to be self-reliant with minimal handholding needed by the government.

India has been on a free-trade agreement (FTA) signing spree for over a year now. Within April 2022, two trade deals one with the United Arab Emirates and Australia were signed and the next year and a half may see the inking of such pacts with a few more countries and trade blocs. This has lent optimism to the otherwise depressed market for textiles and clothing.

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Chandrima Chatterjee

Secretary General