Overall, goods exports have declined for much of the current fiscal year due to slowing demand in the West, the main consumer of India’s textile, gems and jewelry exports. The real estate crisis in China has also slowed down India’s exports.
India’s exports from labor-intensive sectors such as textiles, gems and jewelry as well as leather exports have slowed despite previous free trade agreements (FTAs), as suppliers Efficient suppliers from China, Vietnam and Bangladesh have gained market share. in global trade. said a report from research organization the Global Trade Research Initiative (GTRI).
Overall, goods exports have declined for much of the current fiscal year due to slowing demand in the West – the main customers of India’s textile, gems and jewelery exports. The real estate crisis in China has also slowed down India’s exports. The advisory body said the main reason for weak exports in these sectors is non-tariff barriers (NTBs) imposed by consuming countries and India should take advantage of the ongoing talks on free trade agreements to remove these barriers. NTBs are trade restrictive measures in the form of regulations or quotas that limit imports without the explicit use of customs duties.
At a time when India is signing free trade agreements with developed countries like the UK, GTRI believes that simply signing an FTA cannot lead to an increase in India’s exports of high-value goods. , labor intensity and India’s clothing exports to Japan.
“The most favored nation (MFN) tax on clothing in Japan is 10%.
During the FTA negotiations between 2008 and 2010, it was believed that if Japan could reduce tariffs to zero after the FTA, then India’s clothing exports to Japan would benefit from a significant increase. The two countries agreed to eliminate customs duties on all garments from the first day the India-Japan FTA came into effect. But data from the past 12 years shows that the expected increase has not occurred,” GTRI said.
“Competition from more efficient suppliers from China, Vietnam or Bangladesh could be the cause. Developed countries with high per capita income prefer high-fashion designer clothes that are produced in large quantities. While developed countries buy 70% of their clothes from mixed synthetic materials, their share in Indian exports is just under 40%. On average, labor-intensive manufacturing units in India employ 20 people, compared to 1,000 in China,” the report added.
Earlier this year, the Federation of Indian Export Organizations (FIEO) also said that an analysis of the industry’s export performance over the past five years shows a worrying trend that India is witnessing a decline in global market share in labor-intensive sectors.
FIEO said the growth in Indian exports in recent years can largely be attributed to the rerouting of crude oil trade routes through India to Europe and “this phenomenon may not be sustainable in the coming years.” next year”.
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