Tariff Relief Under Trade Pacts to Boost Indian Textile Competitiveness, Say Industry Leaders

Indian textile products are becoming significantly more competitive against goods from rival manufacturing nations such as Pakistan and Bangladesh following duty reductions secured through trade pacts, according to industry representatives speaking at an outreach session in Coimbatore.

What Happened

During the Free Trade Agreement (FTA) Outreach Programme held in Coimbatore, Tamil Nadu, representatives from export promotion bodies highlighted how recent trade agreements are reshaping the global market landscape for domestic manufacturers. Textile Export Promotion Councils (EPCs) are conducting awareness sessions across major manufacturing hubs to guide businesses on changing regulatory requirements, duty benefits, and operational shifts resulting from government trade policies.

Speaking to ANI on the sidelines of the event, Shailesh Martis, Additional Director at the Cotton Textiles Export Promotion Council (TEXPROCIL), explained that past tariff structures placed Indian goods at a steep disadvantage in major markets abroad. According to Martis, earlier duties ranging between 9.6 per cent and 12 per cent on Indian products under the UK trade framework are transitioning to zero. This shift eliminates a long-standing advantage held by countries like Pakistan and Bangladesh, which have enjoyed duty-free access in these markets for extended periods.

Martis also stated that an FTA with the European Union has been signed and is currently awaiting implementation. Once active, it is expected to provide a similar duty advantage of 9.6 to 12 per cent on high-volume exports such as apparel and home textiles.

Key Highlights

• Duty elimination: Indian textile shipments will move from tariff rates of 9.6 to 12 per cent down to zero under the UK FTA.
• Leveling the regional field: The tariff relief removes the duty disadvantage Indian exporters faced relative to Pakistan and Bangladesh, which have long held zero-duty status.
• Anticipated EU market gains: Implementation of the European Union pact is slated to provide a 9.6 to 12 per cent tariff advantage, benefiting large-volume exports like home textiles and apparel.
• Cluster-based outreach: Directed by the central government, textile export promotion councils are running guidance programmes in major manufacturing clusters across India.
• Operational support: Sessions focus on educating exporters on compliance, product requirements, and practical international trade mechanisms.

Why This Matters

According to textile council leaders, tariff differentials directly determine market access and export volumes. Because competing nations such as Bangladesh and Pakistan previously accessed key consumer markets without import duties, Indian exporters faced a persistent pricing handicap of up to 12 per cent.

Removing these tariffs provides domestic manufacturers with an equal footing in major overseas markets. Beyond tariff adjustments, industry leaders noted that operational understanding is essential for businesses to capitalize on these agreements. R. Sivalingam, a member of the Powerloom Development & Export Promotion Council (PDEXCIL), stated that the primary objective of these outreach initiatives is to clarify ground-level trade mechanisms, regulatory standards, and product specifications so manufacturers can confidently scale up outbound shipments.

What to Watch Next

Following the Coimbatore session, export promotion councils plan to continue their nationwide educational drive under central government directives. The outreach initiative began with its first session in Ahmedabad in June, with Coimbatore serving as the second cluster. Moving forward, the councils are scheduled to conduct outreach programmes in additional textile hubs, including Ichalkaranji, Solapur, Panipat, and Jaipur.

Exporters are also monitoring the operational rollout of the European Union agreement to begin utilizing the projected 9.6 to 12 per cent duty advantages for home textiles and apparel shipments.

Frequently Asked Questions

What was the main purpose of the Coimbatore outreach programme?

The event aimed to create awareness among textile exporters regarding duty benefits under free trade agreements, operational processes, international product requirements, and regulatory frameworks.

How do the tariff cuts impact competition with Pakistan and Bangladesh?

Exporters from Pakistan and Bangladesh have historically accessed key markets under zero-duty arrangements, while Indian goods faced duties between 9.6 and 12 per cent. The removal of these duties under recent pacts bridges that tariff disparity.

Which manufacturing clusters are scheduled for upcoming outreach sessions?

Following sessions in Ahmedabad and Coimbatore, future programmes are planned for manufacturing clusters in Ichalkaranji, Solapur, Panipat, and Jaipur.

Source: ANI report via The Tribune.