Indian Textile Industry Needs To Gear Up For Reaping RCEP Benefits – CITI
Shri Sanjay K. Jain, Chairman, CITI stated that the Indian Textile Industry can play an important role in enhancing total merchandise trade among the RCEP member countries. However, for achieving this, Indian textile industry needs appropriate policy measures, which will also make it globally competitive. Mr Jain also opined that India has to be cautious in this proposed mega trade pact which is likely to be concluded by the end of 2019.
Mr Jain pointed out that Regional Comprehensive Economic Partnership (RCEP) is a gigantic regional bloc in size and scope as it contributes approximately 39% of the global GDP and is also home to almost three-and-half billion people. The huge population size makes this region a big market for the world trade, including textiles and clothing.
RCEP is the proposed comprehensive regional economic integration agreement amongst 16 Nations (10 Member Countries of the Association of South-East Asian Nations, ASEAN – Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, Philippines, Laos and Vietnam; and six FTA partners of ASEAN viz. China, Republic of Korea, Japan, Australia, New Zealand, and India). It covers negotiations on goods, services, investment, economics and technical cooperation, investment, e-commerce, intellectual property rights, etc.
Mr. Jain mentioned that the RCEP member countries’ total export of T&C to the world is US$ 413 billion out of world’s total T&C exports (US$ 836 billion), accounts for 49.44% share, in the year 2018. While India’s share in the total export of T&C among RCEP nation’s remains at 9% (approx.) during the same period. Further, India’s export of textiles and clothing to the RCEP nations is 13.40% of its total exports to the world, in the year 2018.
Mr. Jain further pointed out that India maintains a trade surplus in T&C Sector with all the RCEP member countries except China. He further said that India had a trade deficit of almost US$ 1 billion with China in T&C in the year 2018.
Chairman CITI commented that India stands at a juncture where it does not have any free trade agreement with two of its biggest trading partners – the USA with which it has the highest trade surplus and the China with which it has the highest trade deficit.
Mr. Jain also pointed out that the ongoing US-China trade war, on the one hand, presents an opportunity to the Indian textile manufacturers to enhance it exports to the USA, while the RCEP trade scenario reveals that India must tread cautiously, particularly with China, as half of India’s T&C trade in RCEP is with China, with which it had a big trade deficit of almost US$ 1 billion in 2018.
Mr Jain also commented that the ongoing US-China trade war cannot go unnoticed as China would be looking for new markets for its products. India needs to be over cautious while negotiating with China which is already re-routing its textiles into India through Bangladesh, Sri Lanka, etc.
Mr Jain concluded by saying that India’s Trade deficit with China in T&C Sector is likely to be widened once RCEP is concluded and could be detrimental for India’s domestic textile manufacturers. Hence, in order to reap the RCEP market, I call upon all the stakeholders of the Textiles and Clothing value chain to gear up quickly with their full potential and make the textile industry globally competitive!