The US accounts for 20 to 35 per cent of India's ready-made garment exports and the TPP is going affect India's textile sector in two ways: First, TPP member countries will get preferential access in the US markets as against Indian's exporters. This would disadvantage India as US import duties on readymade garments are high.
To help textile industry reach its earning potential of $500 billion by 2025 from the current level of $110 billion, industry body Assocham has#
Secondly, the 'Yarn Forward Rule' makes it mandatory to source yarn, fabric and other inputs from any or a combination of TPP partner countries to avail duty preference. This would change the dynamics of the existing global supply chain in textile and clothing sector.
At present, India exports yarn and fabric to Vietnam, which then makes the textiles and exports to countries like the US. Now, because of yarn forward rule, they will be under pressure to develop local production. While Vietnam will have zero-duty access to the US market for textiles, Indian players will have to pay higher duties, which will make India's which will make India's textiles exports uncompetitive, the note said. (SH)
ALCHEMPro News Desk – India
marketing@alchempro.com
