Ind-Aus ECTA to ensure full capacity utilization of Indian apparel factories, says AEPC Chairman
Apr 03, 2022
New Delhi [India], April 3 : Indian apparel factories' capacity will be utilized in full with the Economic Cooperation and Trade Agreement (ECTA) signed between India and Australia, stated the Apparel Export Promotion Council (AEPC) Chairman Narendra Goenka on Sunday.
Goenka welcomed the ECTA that was signed between India and Australia on Saturday and stated that it offers duty-free access to 96 per cent of Indian goods including the labour-intensive apparel sector.
Goenka said, "Australia is the largest apparel importer in the southern hemisphere. Indian apparels currently face an average tariff of 4.8 per cent in Australia as against zero-duty apparel from China and Bangladesh. Duty-free access to Indian apparel will bring us at par with global competitors and make our products competitive."
Australia is majorly dependent on China for its apparel imports. However, India has been able to retain its share of around 3 per cent of total apparel imports in Australia despite shrinkage in import orders from across the globe including Australia during the Covid-19 pandemic. It was 3.22 per cent with an import of 203 million US dollars of Indian apparel in 2020.
"Removal of the tariff differential vis-a-vis China would further help the Indian garment industry to take advantage of the China Plus One strategy being embraced by many countries. Australia is a focus area for Indian apparel exports since similar products are manufactured in India at similar price points," Goenka said.
India has the potential to export knitted jerseys, pullovers, and t-shirts from man-made fibres which is a big chunk of Australian apparel imports. Jerseys, pullovers, cardigans, waistcoats, and similar articles, knitted/crocheted, of man-made fabric (MMF), have been the biggest apparel imports last year. The second position was comfortably taken by cotton t-shirts, the AEPC chairman added.
The Indian apparel industry is good for producing spring and summer products, but not as good for making winter goods. Thus, Indian factories do not utilize their full capacity while producing winter goods. Australia, which is in the southern hemisphere, will need spring and summer products when it's a lean season for Indian apparel factories.
"Zero duty deal with Australia in the southern hemisphere will keep Indian factories fully utilized during its lean period with orders for spring and summer products that we are best in. This will help utilize the full capacity around the year. Zero duty access would more than triple Indian apparel exports to Australia in three years," Goenka added.
He said that the deal will give further fillip to exports, employment and investment in the country's apparel industry. Women constitute around 70 per cent of the 14 million workforces and the industry, which is predominantly in the MSME segment, offers livelihood to a large section of migrant workers and rural youths.
"Any benefit to the industry will have wide ramifications across the country with major social and economic benefits. India has a unique position with a strong presence in the entire value chain from fibre to fashion. A strong apparel industry will go a long way in helping achieve Atmanirbhar Bharat," he said.
