According to analysts, trade agreements which the government has entered into with some countries in recent months will help the home textile industry to boost its exports in the coming years. Recently, India signed free trade agreements with the UAE and Australia while discussions with the EU are ongoing on similar lines.
India and Australia have signed a comprehensive interim free trade agreement, beneficial to both the countries. Australia gains access to a more reliable partner, an alternative to China while India gains access to uninterrupted supply of key inputs. The agreement unlocks huge opportunities for Indian exporters as 95% of the Indian goods, including textiles, will not face any kind of duty in the Australian market.
Covid-19 has altered the global supply chain with several textile and apparel brands preferring to source from alternative destinations other than China. China accounts for 26% of the total global cotton production, of which 80% is produced in the Xinjiang region. The US and other Western countries have accused China of committing crimes against humanity against the ethnic Muslim population in Xinjiang, leading to a ban on Xinjiang cotton by the US and others. India is the second-largest cotton producer in the world after China. The ban on cotton from the Xinjiang region should lead to a long-term increase in capacities in India.
Meanwhile, India’s Home textile exports rose by 54% in H1FY22 to US$3.5 bn. India accounts for 7-9% of the global Home Textile Trade setup due to better pricing and superior quality.