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Tariff Concession Will Boost India's Textile-Apparel Exports to EFTA Countries

Perhaps a landmark step to boost Indian apparel exports in the 4 EFTA countries, the just inked Trade and Economic Partnership Agreement (TEPA) will help in promoting trade and also increase collaboration between the signatories, says Chandrima Chatterjee, Secretary-General at the Confederation of Indian Textile Industry (CITI).

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21 March 2024

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  • The four EFTA States are open, competitive economies committed to the progressive liberalisation of trade in the multinational arena as well as in free trade agreements.
  • EFTA was founded by the Stockholm Convention in 1960. Relations with the EEC, later the European Community (EC) and the European Union (EU), have been at the core of EFTA activities from the beginning.
  • In 2021, EFTA was the tenth largest trader in the world in merchandise trade and the eighth largest in trade in services.
The TEPA would contribute towards alleviating poverty, create new employment opportunities, improve living standards, and ensure a large and steadily growing real income in their respective territories through the expansion of trade and investment flows, while allowing for the optimal use of the world’s resources in accordance with the objective of sustainable development.
Expanding Trade The TEPA would contribute towards alleviating poverty, create new employment opportunities, improve living standards, and ensure a large and steadily growing real income in their respective territories through the expansion of trade and investment flows, while allowing for the optimal use of the world’s resources in accordance with the objective of sustainable development. Merve Sehirli Nasir / Unsplash

This is the third and concluding part in the WireFrame series on the India-EFTA TEPA.

The Confederation of Indian Textile Industry (CITI) claims to be the only national association that covers the entire spectrum of the textile and clothing industry spanning domestic and exporting units, including regional and sectoral associations from farms to garments and even textile machinery.

Working as an interface between the Government of India and industry, it helps the government in providing policy inputs, supports the textile and clothing sector, in capacity building, awareness creation and policy formulation that enhance the industry’s growth potential.

texfash.com: How is the TEPA going to benefit Indian apparel exporters? What exactly is going to change? Also, how will it impact Indian yarn/fabric exporters as well as exporters of cotton?
Chandrima Chatterjee: TEPA is a significant step towards boosting India’s apparel exports in the EFTA countries. Out of the four EFTA countries, Switzerland and Norway are the two most important markets for apparel exports. Both these countries imported apparel products worth $10.7 billion in 2023 in which India’s share was a minuscule 4%. Duty difference which India is facing as compared to its competitors was one of the major reasons for this low share. However, after the signing of TEPA, with immediate zero-duty access, India will have a level playing field and it will catalyse India’s apparel exports to these countries.

As far as exports of yarn and fabric are concerned, it is also going to improve as EFTA countries particularly Switzerland, offer itself as a buyer for raw materials and intermediate products, to be converted into high-quality and sustainable end products.

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How is the phase-out of tariffs going to happen in case of textile/clothing product ranges? How is it going to affect exports?
Chandrima Chatterjee: India will have immediate zero-duty market access for all textile and product categories with the EFTA countries. This tariff concession will boost India’s exports in these markets and India will surely achieve a two-digit market share in a short period.

The industry is extremely sure that this EFTA will further increase collaboration between the signing countries and will confirm the commitment of India and EFTA to develop trade and investment relations in a way that is conducive to sustainable development.

Which textile/apparel items of the EFTA countries will now find a market in India? Please elaborate.
Chandrima Chatterjee: EFTA countries are known for their high-quality and sustainable end-products. CITI for long has been requesting the government to expedite the signing of an FTA with Switzerland as both India and Switzerland complement the needs of each other in the textiles and apparel space. Switzerland can be a good supplier of textile technology and machines to India, and after TEPA imports of the same is expected to increase.

I am pleased to inform that CITI and Swiss Textiles, which is one of the important national associations for textiles and apparel in Switzerland, signed an MoU in November 2023 with the aim to promote bilateral trade and investment as also engage for more product-specific B2B interactions, knowledge sharing, capacity building, etc, based on the respective core competencies of both the countries.

How are the Rules of Origin going to affect textile/apparel trade between the EFTA countries and India?
Chandrima Chatterjee: The present Rules of Origin seem in line with the other trade agreements that India has recently signed and the industry has not reported any cause of concern towards this. The present TEPA allows for Indian exporters to file a “Self Declared Certificate” which is a great step towards ease of doing business and will help in promoting trade between the signing countries.

Chandrima Chatterjee
Chandrima Chatterjee
Secretary-General
Confederation of Indian Textile Industry

The industry is extremely sure that this EFTA will further increase collaboration between the signing countries and will confirm the commitment of India and EFTA to develop trade and investment relations in a way that is conducive to sustainable development.

Richa Bansal

Richa Bansal

RICHA BANSAL has more than 30 years of media industry experience, of which the last 20 years have been with leading fashion magazines in both B2B and B2C domains. Her areas of interest are traditional textiles and fabrics, retail operations, case studies, branding stories, and interview-driven features.

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Also in this WireFrame series

 
 
  • Dated posted: 21 March 2024
  • Last modified: 22 March 2024
 
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