Indian textiles to have duty free access to Australia
For Indian textile exporters, India-Australia Free Trade Agreement (FTA) will be quite advantageous. With the FTA coming into effect from December 29 this year, Australia will provide zero import duty access to Indian textiles, which earlier was at 5% import duty. It is likely to provide a ‘level playing’ field for Indian textile exporters in 2022-23.
Image Credit: Pixabay
The India-Australia Free Trade Agreement (FTA), which is coming into effect from December 29 this year, will provide zero import duty access to Indian textiles from 5% import duty presently. Consequently, it is likely to provide a ‘level playing’ field for Indian textile exporters.
According to an India Ratings and Research (Ind-Ra) report, the FTA, by eliminating the import duty on textile exports from India, will bring the prices of Indian textiles at par with China, Vietnam and Bangladesh. Indian textile exports to Australia contribute 5-6% to the total Australian demand. Since some exporting countries are facing economic challenges and the need to diversify supply chains is increasing, textile/garment producers of India are likely to benefit.
Ind-Ra Director Rohit Sadaka said, “Our rating outlook on textile companies remains stable and while we expect a demand slowdown in exports to developed markets, some of that may be mitigated by domestic demand and softening cotton prices. The benefits of FTAs are likely to be at the margins in the initial couple of years, but over a period of time, this will provide opportunities for diversification and moving up the value chain for the Indian cotton industry”.