The Hon’ble Union Finance Minister announced the Union Budget for 2025 today. Commenting on the Budget, Shri Bhadresh Dodhia, Chairman, MATEXIL (Manmade and Technical Textiles Export Promotion Council), stated, “The Budget is Positive , Pragmatic , Growth oriented and in line with contemporary requirements and is well-positioned to drive growth in the textiles sector.” One of the key highlights of the Budget is the revision of classification criteria for MSMEs, both in terms of investment and turnover. Shri Dodhia pointed out that nearly 80% of the textiles sector operates within the MSME clusters, and this revision would empower these units to achieve scale, enhance competitiveness, and contribute significantly towards making India a global manufacturing hub for textiles.
Additionally, the Budget has introduced important amendments in the Basic Customs Duty (BCD) rates on knitted fabrics, covered under nine tariff lines. The revised rates have been changed from "10% or 20%" to "20% or ₹115 per kg, whichever is higher." Furthermore, two more types of shuttleless looms have been added to the list of fully exempted textile machinery. These moves would enhance the textile sector’s export competitiveness, according to the Chairman, MATEXIL.
Shri Bhadresh Dodhia also appreciated the increased fund allocation for key government schemes such as RoDTEP (Remission of Duties and Taxes on Exported Goods), RoSCTL (Rebate on State and Central Taxes and Levies), and Production-Linked Incentive (PLI) Scheme for Textiles.
He expressed confidence that these initiatives will boost the export potential of manmade fibre textiles and technical textiles and would strengthen India’s position in the global markets.
Source: Press Release
On Saturday, 1st February, the Union Budget presented by Finance Minister Nirmala Sitharaman gave a big boost to the textile industry announcing a 19% increase in the Budget Estimates for AY 2026-27. The BJP-led government allotted Rs 5272 crores to the Ministry of Textiles this year as compared to Rs 4417.03 crores in the Financial Year 2024-25. Additionally, the government has decided to boost cotton production and has announced a five-year Cotton Mission. Amid this, the government has decided to address the challenges of stagnant cotton productivity, especially extra-long staple varieties.
“Science and technology support will be provided to farmers under this Mission. The Mission will increase the farmers’ income and augment a steady supply of quality cotton,” the Ministry of Textile was quoted as saying. Notably, India’s mission to rejuvenate India’s traditional textiles comes at a time when the country has no surplus in the cotton production sector. At present the country yields 450-kilogram per hectare, which is the lowest against a global average of 800-kilogram plus.
Fund for technology upgrade
Of the Rs 5272 crore allocated in the 2025-26 budget for the Textile industry, Rs 635 crores will be used to upgrade the technology that is used by the textile industry under the Amended Technology Upgradation Fund Scheme (ATUFS). In addition to this, the Finance Minister further gave a boost to the industry by issuing a list of exempt pieces of machinery and looms used for textile production. ATUFS was founded in the year 2016 and is now also known by the names of the Modified Technology Upgradation Fund Scheme (MTUFS), Restructured Technology Upgradation Fund Scheme (RTUFS) as well as the Revised Restructured Technology Upgradation Fund Scheme (RRTUFS).
The scheme aims to boost the ‘Make In India’ initiative and ease of doing business by promoting exports and job creation, particularly for women. It also aims to focus on zero effect and zero defect in manufacturing. The scheme also aims at reducing focus on imports from other countries, further encouraging improved quality in textile processing.
How Bangladesh crisis may help India in Textile sector
Interestingly, the ongoing political crisis in the neighboring country of Bangladesh is aiding India’s garment industry to flourish by enhancing exports. Bangladesh used to be the second largest exporter of garments but the sector in the neighbourinfg country is looking at uncertainties amid a financial crisis, power crisis and violece. After the fall of the Sheikh Hasina-led government, India has scope to enhance increased cotton exports to the USA, UK, France, Spain, Italy, Netherlands, etc.
The ongoing political turmoil has affected its garment industry forcing the importing countries to look for alternative sources. Following this, India has emerged as a key beneficiary of the shift experiencing an increase in its textile and apparel products. As per the reports, between January and November 2024, India’s garment exports to the US rose by 4.25% to $4.4 billion, while Bangladesh’s exports to the US declined by 0.46% to $6.7 billion. Amid this, the Indian government is making efforts to bolster the textile industry. This includes providing financial support, tariff reductions on raw materials and machinery, and incentives to encourage local production.
As per the economic survey published on 1st February, India is the sixth largest exporter of textiles and apparel globally, contributing significantly to the Gross Domestic Product of the country, industrial production, and exports. “India exported textile items worth USD 34 billion in 2023, with apparel constituting 42% of the export basket, followed by raw materials semi-finished materials at 34% and finished non-apparel goods at 30%. Europe and the US consumed nearly 66% of India’s apparel exports, 58% of finished non-apparel goods, and 12% of raw materials semi-finished materials. Other prominent destinations include the UK (8%) and the UAE (7%). The Survey points out that textile exports remained resilient throughout the COVID-19 period (2020 to 2022),” the survey read.
In the year 2024, the government stated that India’s textile industry is expected to grow to USD 350 bn by 2030 and add 3.5 crore jobs.
Source: OP India
Synopsis Narendra Modi US Visit: India is rapidly making concessions to the US to avoid a trade war under President Trump. Prime Minister Modi's government has cut tariffs on various imports and agreed to accept unlawful migrants. Modi will meet Trump in Washington, with India aiming to strengthen trade, defense, and technology ties while attracting manufacturers leaving China. Few countries are moving faster than India to appease US President Donald Trump in an effort to head off a potentially devastating trade war. In a matter of weeks, Prime Minister Narendra Modi has delivered a rapid series of concessions to the White House on issues core to Trump’s agenda, offering an early picture of how New Delhi plans to deal with the new president as he slaps tariffs on rivals and allies alike India’s latest accommodation came on Saturday, when Modi’s government unveiled the first-ever overhaul to its tariff regime, which included sweeping cuts to duties on imports from textiles to motorcycles. It follows New Delhi’s pledge to accept thousands of unlawful migrants from the US and maintain the US dollar as its trading currency. Modi has been invited to meet Trump in Washington next week, a White House official said on Monday night, requesting anonymity to discuss the official visit. Trump last week said he expects India’s prime minister to visit the White House this month, making him one of the first foreign leaders to visit Washington since the US leader took office. The quick actions, coming in the absence of any specific new threat from Trump, underscore the more conciliatory mood that has taken hold in India as Trump’s second term gets underway. The approach marks a contrast from the harder line drawn by Modi during Trump’s first term, when warm ties between the two leaders weren’t enough to overcome trade impasses that led Washington to yank trading privileges for India. Indian officials, asking not to be identified, say they are eager to preserve deepening ties in trade, defense and technology-sharing between the two nations, as well as bolster India’s status as a destination for foreign manufacturers leaving China. New Delhi has more to gain than lose by maintaining friendly ties with Trump, they said.
Doing Everything’ The Ministry of External Affairs didn’t immediately respond to an email sent after office hours. “India is quite central to the US in every way, whether it’s the Indo-Pacific strategy as well as where to tell companies to go to avoid tariffs,” said Alicia Garcia-Herrero, chief economist for Asia-Pacific at Natixis. “The risk of major tariffs on India is low, but it seems they’re doing everything they can to avoid tariffs.” overnments around the world are racing to get ahead of protectionist moves by the US as Trump follows through with new tariffs on Canada, Mexico and China — raising new threats to global growth and roiling global markets. Already, South Korea has said it is considering buying more US food and energy, while Japan has said it is seeking stable energy supplies from Washington. In Australia, Trade Minister Don Farrell has reached out to his US counterpart to organize a meeting, a spokesman for the minister said. Australia is keen to move quickly given the threat of tariffs on its exports of aluminum and copper. India in particular has much to lose in any trade war with the Washington. The nation’s overall trade deficit is $78.1 billion — driven largely by an outsize energy-import bill — and it’s cushioned by a bilateral surplus with the US worth $35.3 billion in the fiscal year that ended last March.
Tighter Ties In recent years, India and the US have bolstered cooperation in areas including defense, technology-sharing and nuclear cooperation, as Washington looks to cultivate New Delhi as regional bulwark against China. India has won new factories from US companies such as Apple Inc. and Micron Technology Inc. Yet Trump has repeatedly singled out India and its high trade barriers and has pledged reciprocal duties on the South Asian country. Modi’s decision to reduce levies on heavy-duty motorcycles targets a US export that Trump has repeatedly said gets unfair treatment: Bikes made by Milwaukee-based Harley-Davidson Inc., which for years grappled with India’s complex tariff regime. In declaring India “not a tariff king,” Finance Secretary Tuhin Kanta Pandey echoed a nickname that Trump bestowed on the country during his first term.
Sticking Points
The changes made in tariff structure either resolve, or show the intent of resolving, issues which have been raised by Trump in India’s context,” said Amitendu Palit, an economist specializing in international trade and investment at the National University of Singapore. Other sticking points remain between the two countries. India continues to import large volumes of its crude oil from Russia, which the US has sanctioned for its invasion of Ukraine. Separately, the US indicted an Indian government official last year on allegations of organizing a conspiracy to murder an American citizen on US soil. India has said its recommended legal action against an individual it believes is involved in the plot. One risk for India in appeasing Trump is that it risks courting additional demands from the US leader, Palit said. “Trump’s trajectory is if you agree to him once, you can’t be sure that it’s done forever, because he will come back asking for a higher price,” he said. “That’s a challenge.”
Source: Economic Times
Synopsis Tax changes in the new budget aim to boost local manufacturing, enhance trade, and ease business operations while providing tax relief to the common man. Customs duties have been rationalized, with the average rate reduced. Additionally, reforms in direct taxes focus on trust-based administration and simplified compliance. Changes in taxation unveiled in the budget are aimed at promoting local manufacturing, enhancing trade, improving ease of doing business and providing relief to the common taxpayers, Central Board of Indirect Taxes and Customs (CBIC) chairman Sanjay Agarwal said Monday.
Source: Economic Times
As the world is drawn into a trade war, India and the UK will sit down and resume negotiations on a free trade agreement on February 24. A team of negotiators from the UK will be in New Delhi to start the 15th round of talks. Negotiations on the FTA have been on hold for around a year — a period which saw a change in government in the UK, the return of President Donald Trump in the US, and the beginning of a tariff war involving the biggest economies of the world. Having imposed tariffs on Canada, Mexico and China, Trump has said similar action could be taken against the European Union “pretty soon”. He has, however, left a window open for a deal with the UK. As the largest importer in the world seeks to curb imports, major exporting countries would be looking for markets elsewhere and a renewed push for bilateral and regional trade pacts is expected, according to experts. India’s recent move to pull back from protectionism by bringing down peak import duties to 70% from 150% would be another factor that will ensure that negotiations restart on a different note and not exactly at a point where things were left off in March 2024, experts say. The FTA negotiations between India and the UK were launched in January 2022 and since then 14 rounds of talks have been held between officials of both sides. Some of the rounds have been long drawn. Despite the intensity of discussions, some of the issues are still to be sorted. From an Indian point of view, the UK’s demand for greater mark et access in automobiles, whiskey and some other trade-related issues like rules of origin and intellectual property rights are key areas that are taking time for resolution. In the services sector, the UK is seeking national treatment for its companies. India’s demand for easier access to the UK market to its professionals through a liberal visa regime is one of the areas where common ground is eluding the negotiators. Apart from tariff reduction, the Budget announcement of increasing the foreign investment limit on insurance to 100% would be handy in pushing negotiations on the services sector further.Along with the FTA, India and the UK are also negotiating a bilateral investment treaty (BIT).
The Budget announcement of revision of text of the model investment treaty to make it more investment friendly will also give a push to the negotiations on BIT. The UK is the 16th largest trading partner of India and one of the three countries among the top 20 with which it has a surplus. In April-November 2024, bilateral trade between the two countries stood at $15.0 billion. India’s exports to the UK stood at $9.6 billion and imports were $5.4 billion. Both countries also have a substantial services trade. Services exports to the UK are higher than goods exports. Services exports to the UK in 2023 stood at $17.7 billion while imports were at $12.9 billion. Total FDI from the UK to India stands at $35.2 billion while Indian investment in the UK is at $12.9 billion.
Source: Financial Express
Synopsis India's manufacturing activity hit a six-month high in January, driven by strong domestic and international demand. New orders saw the fastest growth since July and international sales reached a 14-year peak, leading to significant job creation. Price pressures eased slightly; business confidence remained high. India's manufacturing activity surged to a six-month high of 5 7.7 in January, starting the year with strong output and export growth, according to a private survey released on Monday.
The HSBC Purchasing Managers ‘Index (PMI), compiled by S&P Global, was at a 12-month low of 56.4 in December 2024 and 56.5 in January 2024. New orders increased at the fastest pace since July, driven by both domestic and international demand. "Domestic and export demand were both strong, supporting new orders growth," said Pranjul Bhandari, chief India economist at HSBC. International sales posted their sharpest increase in 14 years, with businesses reporting gains from across the globe, the survey mentioned. This growth led to a significant rise in job creation, marking the fastest employment expansion in two decades. Meanwhile, price pressures also accelerated, with input costs rising due to increased spending on freight, labour and materials, the survey said. However, the rate of inflation was the lowest since February 2024. "Input cost inflation eased for a second month, relieving pressure on manufacturers to raise final output prices," said Bhandari. Increase in selling prices was supported by positive client appetite, as per the respondents, the survey mentioned Business confidence also improved, with 32% of firms anticipating growth and only 1% forecasting a reduction. "According to panel members, buoyant underlying demand, better customer relations, favourable economic conditions and marketing efforts all bode well for growth prospects," the survey noted.
Source: Economic Times
Synopsis The US has imposed tariffs on imports from China, Canada, and Mexico, presenting significant export opportunities for India. Increased costs for American consumers could lead US buyers to seek alternative suppliers, benefitting Indian sectors like electrical machinery, auto components, and apparel. Potential gains depend on India's production capacity and competitiveness. The imposition of customs duties by the US on imports from China, Canada, and Mexico provides huge export opportunities for India to America, exporters say.
The tariffs would affect exports from China, Canada, and Mexico to the US as they would push prices of their goods in the American market, making them less competitive. "The move can create opportunities for Indian exports due to the trade diversion effects as US buyers will seek alternative suppliers to avoid higher costs," Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai said.
He said the extent of benefits depends on India's production capacity and competitiveness. "The sectors which are likely to gain are electrical machinery and components, auto components, mobile, pharma, chemicals, apparel, fabrics," Sahai added.
US President Donald Trump on Saturday signed an order to impose stiff tariffs on imports from Mexico, Canada and China, fulfilling a campaign promise but raising the prospect of increased prices for American consumers. Trump is declaring an economic emergency to put duties of 10 per cent on all imports from China and 25 per cent on imports from Mexico and Canada - America's largest trading partners - except for a 10 per cent rate on Canadian oil. During April-November 2024-25, the US was the second largest trading partner of India with USD 82.52 billion bilateral trade in goods (USD 52.89 billion worth of exports, USD 29.63 billion of imports and USD 23.26 billion trade surplus)
Source: Economic Times
Synopsis India's government has significantly reduced import tariffs across a range of goods, signaling an end to protectionist measures. This move aims to avoid trade retaliation from the US while making India a more competitive and open economy. The average tariff rate has dropped to 10.66%, underlining India's commitment to integrating into global supply chains. India’s government made significant cuts to import tariffs in its budget and signaled it won’t shelter businesses behind protectionist measures, a clear strategy to head off any retaliation from US President Donald Trump who began a new trade war with key partners.
The reduction in import duties covered a range of goods from electronics to textiles, with experts saying it’s the first time India had made such major moves on its tariff structures. A notable change was a cut to import taxes on high-end motorcycles, such as those made by Harley Davidson Inc., an issue routinely raised by Trump since his first term in office.
“We are signaling that India is not a tariff king,” he said. “We are indicating that we are a competitive economy and we are open for business.” India’s move came just a day before Trump announced new tariffs on Canada, Mexico and China, drawing retaliatory action and prompting a selloff in global markets. Bloomberg News had previously reported that New Delhi was evaluating several options, including a trade deal with the US, lower tariffs and importing more American goods to avoid any trade action from Trump. New Delhi also indicated it will help identify and take back undocumented Indian migrants in the US.
The finance secretary said the government’s message to Indian businesses was clear: “don’t get into protectionist mode.” The changes mean India’s average tariff was now 10.66%, down from 11.65% earlier, Sanjay Kumar Agarwal, chairman of the Central Board of Indirect Taxes and Customs, said Monday. Pratik Jain, a partner at PwC India, said tariff changes were the first major overhaul by India and were “very important, both for simplification and in “The government has clearly chosen not to use tariff as a protectionist tool despite the increasing geopolitical headwinds to this effect,” he said. “India thus remains keen to be a more integral part of global supply chains, as highlighted in the budget speech.” Jain said the effective rates on imports of motorcycles have now been reduced by 10%-20% and the move will benefit countries from where India imports the bikes without a free trade agreement, including the US. The finance secretary also addressed another of Trump’s threats — namely to impose 100% tariffs on the BRICS group of nations if they tried to replace the dollar with a common currency. “We have no intention to replace the dollar as a currency,” Pandey said. “Also, we don’t align with China on the BRICS currency.”
Source: Economic Times
Finance Minister Nirmala Sitharaman clarified that the value of the Indian rupee is market-determined, with no devaluation involved. The rupee's recent decline enhances export competitiveness but may increase the cost of imports. Regulatory measures are in place to handle unclaimed insurance funds, improve claim settlements, and impose penalties for processing delays. The value of Indian rupee is marketdetermined, and there has been no devaluation, which is a feature of a fixed exchange rate regime, Finance Minister Nirmala Sitharaman said on Monday.
The rupee has been falling in recent weeks, and on Monday touched an alltime low of 87.29 against the American currency. Various domestic and global factors influence the exchange rate of the rupee such as the movement of the Dollar Index, trends in capital flows, level of interest rates, movement. In a written reply to the Lok Sabha, Sitharaman said there has been no “devaluation” of the Indian Rupee (INR), which is a feature of a fixed exchange rate regime. "The value of the INR is market-determined, with no target or specific level or band," she said.
Source: Economic Times
A delegation of investors from the four-member European Free Trade Association (EFTA) nations—Iceland, Switzerland, Norway, and Liechtenstein—will be in New Delhi next week to explore business opportunities and strengthen investment ties, commerce and industry minister Piyush Goyal said. EFTA representatives will be in the national capital with more than 100 investors. The visit aligns with the investment commitment made by European nations under the India-EFTA trade agreement—an investment commitment of $50 billion in India within 10 years of the agreement taking effect, and an additional $50 billion in the following five years. The investment is expected to create 1 million direct jobs in India over 15 years. Government officials expect investments to focus on manufacturing in India across sectors such as chemicals, pharmaceuticals, food processing, and infrastructure. The trade agreement between EFTA and India was signed in March last year after 16 years of negotiations, involving 21 rounds. The trade deal is expected to take effect by the end of 2025. Of the four EFTA nations, Switzerland is India’s largest trading partner. During the first eight months of this financial year, India’s exports to EFTA nations stood at $1.28 billion, of which 77 per cent went to Switzerland. Imports stood at $15.8 billion, with 97 per cent coming from Switzerland. The trade deficit stood at $14.5 billion, primarily due to gold imports from Switzerland, which account for 80 per cent of India's gold imports from the country.
Source: Business Standard
Dhaka (Bangladesh): Trade connectivity and economic engagement between India and Bangladesh will continue to strengthen the ties between the two nations, Indian High Commissioner Pranay Verma said on Monday.
The High Commission of India, Dhaka organised an interactive session with leading businesses and business chambers from Bangladesh's textile sector on Monday. The session was held in the context of the upcoming Bharat Tex 2025, a global textile event set to take place in New Delhi, India from 14-17 February 2025. The event will bring together major stakeholders from the textile industry and cover the entire textile value chain under one roof In his remarks at the event, High Commissioner Pranay Verma highlighted the importance of the Ready-Made Garments (RMG) sector in Bangladesh's socio-economic development and also in promoting closer supply/value chain linkages between India and Bangladesh. He identified cooperation between the two countries in the RMG and textile sector as a testament to their interdependence and mutual benefit. He expressed hope that the participation of a large delegation from Bangladesh in Bharat Tex 2025 will open up new opportunities for establishing new supply chain linkages, and investment and technology tie-ups across various segments of the textile value chain.
High Commissioner also expressed hope that trade connectivity and economic engagement between India and Bangladesh will continue to bring the people and businesses of the two countries closer together. Md. Anwar Hossain, Administrator, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) & Vice-Chairman, Export Promotion Bureau (EPB) and Mr. Mohammad Hatem, President, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) were the Guests of Honour for the event. Faruque Hassan, Chairman of the Board of Trustees at BGMEA University of Fashion and Technology (BUFT) and Mr. Md. Jashim Uddin, Chairman of Bengal Commercial Bank & Vice Chairman of Bengal Group of Industries were the Special Guests for the event.
Industry representatives from Bangladesh looked forward to their participation in the Bharat Tex 2025 and expressed confidence that greater economic engagement with India will open up new avenues and growth opportunities for Bangladesh's garment industry.
Source: ANI News
A total of 27 Bangladeshi fabric, denim and garment manufacturers are set to display their latest designs at Texworld/Apparel Sourcing Paris to begin on February 10. The three-day show will take place at the Paris-Le-Bourget Exhibition Centre with great enthusiasm and energy from exhibitors and visitors, according to a statement.
More than 1,200 exhibitors from 31 countries are expected to participate, attracting buyers from all over the world. Out of the total 27 Bangladeshi companies that would showcase their expertise in fashion apparel and denim at the fair, the included Aaron Denim Limited, Hoorain HTF, NZ Denim, Sara Fashionwear, and Nexgen Apparel. Additionally, Asia Link Design, Flash Apparels, Pacific Sports, Quality Apparels, and many others will join under the banner of the Export Promotion Bureau (EPB). Bangladesh’s growing influence in the global fashion and textile markets is evident, the organiser said in the statement, adding the exhibition provides an excellent platform for networking, business development, and showcasing Bangladesh’s vibrant apparel industry to a global audience. Bangladesh will be prominently represented alongside other major manufacturing nations such as China, Turkey, India, Korea, Indonesia, Thailand, Pakistan, and Taiwan, as exhibitors present a wide range of fashion products from across the globe. As Bangladesh continues to strengthen its position in the global fashion industry, this event will offer an exciting opportunity for industry professionals to explore new trends, build valuable connections, and discover cutting-edge fashion innovations, added the statement.
Source: Financial Express
China's manufacturing sector expanded slightly as the year began, according to Caixin China general manufacturing purchasing managers’ index (PMI) data which showed that manufacturing production rose at a quicker pace amid higher new business inflows. As a result, purchasing activity and inventory levels both increased. Business sentiment also improved, though firms remained cautious with hiring as employment levels fell at the fastest pace in nearly five years, according to a release from S&P Global Ratings. Output prices also declined at a quicker pace despite stable input costs, as firms offered discounts to support sales. The headline seasonally adjusted PMI fell to 50.1 in January, down from 50.5 in December. Posting above the 50.0 neutral mark, the latest data signalled those conditions in the manufacturing sector improved for a fourth straight month, albeit only fractionally. Manufacturing production in China increased for a fifteenth successive month at the start of 2025. Moreover, the pace of expansion accelerated from December, in line with the trend for new orders. Higher new business, driven by better underlying demand and increased promotional efforts, supported the rise in output. Some manufacturers also noted that client desires to stockpile underpinned the growth in new work inflows. The rise in new orders stemmed mainly from improvements in domestic demand, however, as export orders fell fractionally in January.
Source: Fibre2fashion
Textile millers in Bangladesh have called on the Government to suspend yarn imports through land ports, citing concerns over misuse of the facility and its detrimental impact on the local industry. The Bangladesh Textile Mills Association (BTMA), representing spinning and textile mill owners, made this appeal in a letter addressed to Finance Adviser Salehuddin Ahmed. The BTMA suggested that yarn imports should only be permitted through seaports. They argue that the current system, which allows imports through land ports, has been exploited, leading to significant challenges for local mills. BTMA President Showkat Aziz Russell explained that the previous Government’s policy revision permitting yarn imports via land ports has created complications. He noted that these ports do not have adequate facilities for thorough inspections of raw materials. Moreover, the allowance for partial shipments has reportedly led to widespread misuse, harming local textile manufacturers. Despite a reported increase in apparel exports in the new fiscal year, Russell indicated that domestic mills are struggling due to various challenges, including low order volumes. He expressed concern over the rising textile exports from India to Bangladesh, which he believes undermines the country’s interests. In their letter, the BTMA warned that the continued import of yarn through land ports could inflict irreversible damage on the textile sector, making it difficult for local industries to compete. They stressed that reliance on imported yarn would lead to increased costs and higher unemployment rates.
The association highlighted the adverse effects of the post-Covid economic downturn and the ongoing Russia-Ukraine conflict on the industry, which is already grappling with rising energy prices, a dollar crisis, soaring interest rates, reduced export incentives tied to LDC graduation, and currency depreciation. Furthermore, the BTMA raised alarms about the influx of yarn and fabrics into the local market at dumping prices from India through various land ports, exacerbating challenges for domestic producers. They pointed out that key land ports, such as Benapole, Bhomra, Sona Masjid, and Banglabandha, lack the necessary infrastructure, skilled manpower, and effective oversight, leading to inefficient management of import and export activities. The association emphasised that allowing yarn imports and partial shipments has severely impacted the domestic textile industry, particularly spinning mills. Local mills face unfair competition from unauthorized yarn marketed through land ports with false customs declarations, resulting in revenue losses for the Government. The BTMA’s letter proposed an immediate halt to yarn imports through land ports and a shift to seaports as a means to protect the domestic textile sector and preserve foreign exchange. They noted that while yarn imports via seaports take 13 to 15 days, they benefit from advanced scanning technologies and better infrastructure for quality control.
Source: Apparel Resource
The European Union (EU)-Chile Interim Trade Agreement (ITA) recently entered into force, following the completion of Chile's ratification process. Signed in December 2023, the ITA is expected to boost business competitiveness on both sides, while providing a shared platform for the development of net-zero economies. It will also boost the EU-Chile privileged partnership. This work will be further underpinned by ongoing initiatives under the Global Gateway, such as development of critical raw materials value chains and the production of green hydrogen in Chile, a release from the European Commission said. The agreement will enable both sides to cooperate on global challenges like de-risking of supply chains and the fight against climate change. The ITA will eliminate tariffs on 99.9 per cent of EU exports and providing a level playing field for EU goods on the Chilean market. It will ensure more effective and sustainable flow of raw materials and derived products; It includes energy and raw materials chapter that will foster investment and provide the EU with steady, reliable and sustainable access to critical raw materials as well as clean fuel like hydrogen, crucial for the transition to the green economy. It will give Chile all the policy space it may need to pursue its industrial policy objectives and ensure EU investors in Chile are treated the same way as domestic investors, the release said. An ambitious trade and sustainable development chapter confirms the parties' commitment to International Labour Organisation (ILO) standards and to the Paris agreement on climate change.The EU and Chile negotiated between 2017 and 2022 to modernise the EU-Chile Association Agreement (in force since 2003). The negotiations concluded on December 9, 2022, and both sides signed the modernised agreement on December 13, 2023.
Source: Fibre2fashion
