In a meeting with the Commerce and Industry Ministry, textile manufacturers and exporters emphasised to take caution against opening up the domestic market for China under the proposed Regional Comprehensive Economic Partnership (RCEP) agreement.
Sources present at the meeting said they pointed out added competition from Chinese cheaper goods may put pressure on domestic sales at a time international business has been under threat from Bangladesh and Vietnam. However, the government has assured them their interests will be protected.
RCEP trade pact, is currently under negotiation with the govt. and based on India’s existing free trade agreement (FTA) with the 10-nation Asean bloc, the RCEP will include all the nations with which the Asean has trade deals — New Zealand, Australia, China, India, Japan and South Korea.
At the last such meeting on RCEP, the Confederation of Indian Textile Industry (CITI) had cautioned the government to tread carefully while ceding space to China in the global textiles and clothing (T&C) sector. Half of India’s T&C trade in RCEP is with China, with which it had a big trade deficit of almost $1 billion in 2018, it had said.
Export of readymade garments, in which India’s export competitiveness has fallen over the past fiscal year, contracted by 2.44 per cent in August. The sector had shown signs of steady recovery in July with 7.66 per cent growth, after months of continuous contraction.
However, CITI said that while the ongoing US-China trade war presents an opportunity to Indian textile manufacturers to enhance their exports to the US, China too would be looking for new markets for its products.
“As long as India’s domestic industry and our national interests is protected, the faster it (the RCEP) is done, the better it is for India,” Commerce and Industry Minister Piyush Goyal, had said in a recent event.
He had added that cotton textile exporters have also requested a speedy conclusion to the negotiations, citing an 8 per cent duty that hinders their chances of exporting to China .