FTA with Australia game changer for India: Industry stakeholders

Balaji, joint secretary of ministry of commerce, recently said at an event that India’s exports would go up to $10 billion by 2025-26 against the present shipment of $7 billion. Under the agreement, Australia has allowed imports of 98.3 per cent items from India at zero duty. Earlier, Indian goods attracted tariffs of about 4-5 per cent, which was a disadvantage as China, Vietnam and Japan have been enjoying zero duty under such trade deals. 

India's garment exports to Australia are expected to jump by 30 per cent in a year, as per Raja M Shanmugham, former president of Tiruppur Exporters’ Association (TEA). “FTAs are very important between the trading countries in this Universal Market Era. The recently concluded trade deal with Australia can provide big boost for Indian textile exports. FTAs with developed world provide big opportunity for developing countries like India.” 

Sanjay Garg, president of North India Textile Mills Association (NITMA), commented, “It is the first FTA with any developed economy in recent memory. The agreement will have a significant positive impact on the labour-intensive textile and apparel industry. Indian textile industry, which is facing a shortage of cotton, will have access to duty-free import with certain quantity.” 

Industry experts feel that government should provide hand-held support to enable exporters to tap the opportunity. They said that exporters need support in the form of liquidity and more to secure export orders and execute them well within time. 

Australia imported apparel worth $8.382 billion during 2021, in which India’s share was just 3.88 per cent at $286.756 million. It was the fourth largest supplier for Australia, while China grabbed the lion’s share with 62.82 per cent of the total, according to Fibre2Fashion’s market insight tool TexPro. 

Australia was the tenth largest market for India’s apparel exports in 2021 when a share of just 1.83 per cent out of the total shipment of $14.943 billion. India’s shipment of apparel to Australia recorded a mild growth in recent years. Exports increased to $217.489 million in 2019 from $183.797 million of 2018 but dipped to $191.152 million in 2020 due to the pandemic. 

ALCHEMPro News Desk (KUL)