The Confederation of Indian Textile Industry (CITI) has called on the Indian textile and apparel sector to prepare themselves so as to reap all the benefits of the Regional Comprehensive Economic Partnership, better known as RCEP.
Sanjay K. Jain, Chairman, CITI, said in a press release that the Indian textile industry needs appropriate policy measures to enjoy the benefits of RCEP and thereby become competitive globally. However, he was quick to add that India should be cautious in this proposed mega trade pact, which will conclude by the end of 2019.
He added that RCEP is a gigantic regional bloc in size and scope as it contributes approximately 39 per cent of the global GDP and is also home to almost three-and-half billion people.
Notably, RCEP is the proposed comprehensive regional economic integration agreement among 16 nations, of which 10 are ASEAN nations, namely, Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, Philippines, Laos and Vietnam. The other 6 are China, Republic of Korea, Japan, Australia, New Zealand, and India – the FTA partners of ASEAN.
“The huge population size makes this region a big market for the world trade, including textiles and clothing,“ corroborated the Chairman.
He further validated his aforementioned statement by saying that in 2018, the RCEP member nations exported US $ 413 billion textiles and garments, which is a share of 49.4 per cent. India’s share in this trade being 9 per cent in 2018.
Importantly, India’s export of garments and textiles to RCEP member nations was 13.4 per cent of total global exports to these countries.
Sanjay Jain said that India has a trade surplus in apparel and textile industry with all RCEP countries except China. He said India does not have any free trade agreement with two of its biggest trading partners – the US, with which it has the highest trade surplus and China, with which it has the highest trade deficit.
Though the ongoing US-China trade war can help Indian textile manufacturers to increase their exports to USA, the RCEP trade scenario tells that India must tread cautiously especially with China, as half of India’s textile and clothing trade in RCEP is with China.