India is pushing for labour-intensive textiles and apparel to be categorised as non-tariff items in ongoing FTA negotiations with the EU. This move aims to address the disadvantage faced by India due to higher import duties imposed by EU nations, particularly on textile products, compared to China. The seventh round of negotiations, crucial for India’s textiles and apparel sector, is underway with the EU, a key export destination for Indian garments.
During the discussions, the proposal to classify textiles as non-tariff barriers was prominently raised, signaling optimism for a positive outcome. India’s textile exports to the EU have witnessed a decline, prompting efforts to enhance export competitiveness by focusing on quality products that meet global standards.
While the elimination of import duties could drive export growth, opinions vary on the impact of zero duty on textile exports. Experts suggest that signing an FTA alone may not significantly boost India’s labour-intensive goods exports. Strengthening product profiles and addressing non-tariff barriers are crucial for maximising export gains.
Negotiations for an FTA between the EU and India, initiated in 2007 and resumed in 2022, with an aim to reduce duties and tackle trade barriers affecting Indian exports. The EU stands as a vital export market for India, ranking second only to the US. An FTA could potentially enhance exports of textiles, and other commodities.
