US-China trade war will help Indian exporters as US apparel firms in search of more investment opportunities in India want a free trade agreement (FTA) between both sides. And for this representatives from 15 US companies met Indian Textiles Minister Smriti Irani recently and suggested improving ease of doing business. An FTA between the United States and India would promote business in the textiles sector.
Manufacturing is moving away from China and there is a window of opportunity for India to attract investments in manufacturing. However, there is a lot of competition from countries like Bangladesh, Vietnam and Indonesia, and India needs to do all it can to increase its relevance. In the last four years, investments worth $30 bn in textiles had moved out of China because of various factors including rising input costs, but very little had come to India.
The delegation, which had representatives from Ralph Lauren, the PVH Group and Carter’s Inc, also discussed business possibilities with Niti Aayog Chief Executive Officer Amitabh Kant and met the faculty of the National Institute of Fashion Technology (NIFT) to exchange ideas on the latest trends in design. The delegation also visited the Brandix India Apparel City in Visakhapatnam under the aegis of the A.P. Economic Development Board (APEDB).
Further, India and Iran can conclude a Preferential Trade Agreement (PTA) by this year end as very limited formalities are to be completed. However, the proposed Bilateral Investment Protection Agreement (BIPA) will take a little longer as details on this front need some more approvals and endorsement.
Meanwhile, Indian Textile Secretary Ravi Kumar met representatives of various association of Surat and has assured power loom industry stakeholders that pending applications for Technology Upgradation Fund Scheme (TUFS) would be cleared within two months. About 6,000 applications from Surat are pending under the scheme for the last two years due to technical reasons. About Rs. 800 cr is stuck under TUFS for long. The clearance of the subsidy amount will boost modernisation in the textile sector in Surat and give them some relief from present crisis.
The industry has recently thanked Nirmala Sitharaman for the announcement of new measures to boost exports and for considering the continuance of MEIS at 4 percent till December end. The Priority Sector Lending (PSL) norms for export credit under consideration of RBI and releasing an additional Rs. 36,000 cr to Rs. 68,000 cr as Export Credit under Priority Sector are also welcoming steps.
The leverage of technology will be used to reduce Time to Export or Turnaround Time which will give cushion to exporting units and will be helpful to meet out the delivery schedule and also reduction of logistics cost. All these measures will give business confidence to the struggling export sector, and pending amount is expected to be reimbursed soon.