New Delhi, Feb 26 (KNN) In ongoing negotiations for a free-trade agreement (FTA) with the European Union, India is advocating for labour-intensive textiles and apparel products to be classified as non-tariff items.

This move comes in response to the EU's imposition of higher import duties, typically ranging between 10-12 per cent, on textile products, putting India at a disadvantage compared to China, the EU's primary supplier in this sector, reported mint.

The seventh round of negotiations, which commenced on February 19, holds significant importance for India's textiles and apparel sector.

Major export destinations such as the EU, the US, and West Asian countries are key markets for Indian garments.

During these negotiations, the proposal to classify textiles as non-tariff barriers was prominently raised.

India has witnessed a decline in textile exports to the EU, from USD 44.43 billion in 2021-22 to USD 36.68 billion in FY23.

This merchandise included readymade garments worth USD 4.30 billion and handicrafts worth USD 330 million.

Despite this, India remains a preferred destination for sourcing textiles due to its commitment to quality and adherence to global standards.

The elimination of import duties, if achieved, is expected to further drive growth in India's textile exports, according to industry insiders.

While the Union commerce ministry and the European Commission have yet to comment on these developments, experts hold differing views on the potential impact of zero duties on textile exports.

Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), believes that simply signing an FTA may not guarantee a substantial increase in exports of India’s labour-intensive goods.

Negotiations for an FTA between the EU and India were launched in 2007 but were suspended in 2013.

Talks resumed in June 2022, with efforts led by commerce minister Piyush Goyal and Valdis Dombrovskis, the executive vice president of the European Commission.

The EU stands as a significant export destination for India, second only to the US.

However, non-tariff barriers have hindered goods exports in recent years.

Additionally, India's production-linked incentives could further enhance exports of textiles, pharmaceuticals, and mechanical appliances, all of which are crucial imports for the EU.

In previous negotiations, progress was made in 18 out of the 23 chapters.

Geographical indications (GIs) remain a key issue for both parties, with bilateral agreements aiming to protect geographical indications and enhance safeguards within trade territories to align with EU standards.

(KNN Bureau)