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February 20, 2019

India plans WTO-compliant measures to boost textile exports

By Hannah Abdulla

India is reportedly set to announce World Trade Organization (WTO) compliant measures to boost its export of apparel and textiles and bring its exporters to a level playing field with those in Bangladesh and Vietnam.

Last year, the US requested dispute settlement consultations with the Government of India at the World Trade Organization (WTO) to challenge export subsidy measures that benefit Indian exporters in a range of industries, including textiles and apparel.

The programmes that were challenged included the merchandise exports from India scheme; the export-oriented units scheme and sector-specific schemes, including the electronics hardware technology parks scheme; special economic zones; the export promotion capital goods scheme; and a duty-free imports for exporters programme. 

The US alleged the export subsidies provide financial benefits to Indian exporters that allow them to sell their goods more cheaply to the detriment of American workers and manufacturers.

The move was later backed by eleven major economies including the EU, Brazil, Canada, China and Japan who agreed the schemes violate the WTO’s fair trade law. 

Textiles secretary Raghvendra Singh told local newspaper Business Standard that the ministry, along with export promotion councils, is now firming up schemes for the apparel sector which are WTO-compliant. The government will also start “trend forecasting” for the textiles sector this month, using commercial intelligence to determine what could be on-trend in the near future as the country gears up to influence global fashion trends.

“This project has been sanctioned and will be set up around 26 February, which basically means that all the commercial intelligence in this sector can be used to forecast the trends in six months or a year. This will lead to a big change which is the need of the hour.

“We are actually getting influenced by international trends. The kind of punch we have in the textiles sector, it is high time that we became influencers,” he added.

Singh pointed out it was difficult for India to compete with countries such as Bangladesh and Vietnam on apparel exports due to the access they have to free-trade agreements with areas such as the EU and US.

He said the ministry has, over the past two months, been working with the Ministry of Commerce and Industry and Revenue to deal with WTO compliance issues.

“These things will obviously be added incentives for the exporters which will allow them to compete with the EU and other countries also.” 

Earlier this month, India’s Council for Leather Exports (CLE) said the country is eyeing leather annual export growth of 9-10% over the next two years. Its plan to get there includes implementing sustainable production models; boosting productivity; putting a greater focus on innovation and design; and undertaking a wide range of marketing activities to make further inroads into potential markets.

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