The Trans-Pacific Partnership (TPP) deal will hit India's textile exports hard by providing zero-duty access to the US market to Vietnam, says a report today.
"TPP is a trade agreement that will open markets and enable countries like Vietnam a zero-duty access to the US market for textiles while Indian players will have to pay 14-32 per cent duty, which will make it uncompetitive. It would have been much better had India too joined TPP," the CII-Wazir Advisors report said.
The US, Japan and 10 other Pacific-Rim nations recently reached a final agreement on the largest regional trade accord in history dubbed as the Trans-Pacific Partnership (TPP) deal.
"TPP will adversely impact the Indian textiles industry because of the yarn forward provision which requires yarn and fabric used in final product to be manufactured in one of the free trade partners to qualify for duty-free treatment under the trade pact.
"At present, India exports yarn and fabric to Vietnam which then exports the finished products to countries like the US. Now, with the yarn forward provision in TPP, they will have to either source it from some other free partner country or produce domestically, hurting India's exports adversely," Sachit Jain, Vice-Chairman, CII National Committee on Textiles, said.
The report called for a push from the government to aggressively enter into as many Free Trade Agreements (FTAs) as possible with select textile markets in Asia and the European Union to safeguard the Indian textile and apparel industry and offset the negative impact of TPP.
