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01 TEXTILES AND APPAREL

IBEF, JULY 2017


India was the largest producer of cotton in 2016-17
It has about 24 per cent of the world’s spindle capacity and 8 per cent of global rotor
capacity
It ha the highest loom capacity (including hand looms) with 63 per cent of the world’s
market share.
It has 14 per cent of the world’s production of textile fibres and yarns (largest producer of
jute, 2nd largest producer of silk and cotton; and 3rd largest in cellulosic fibre)
2nd largest producer of Manmade Fibre and Filament
It contributes 14 per cent to industrial production and 4 per cent to GDP
Employs 45 million people
Has a share of 15 per cent of total exports
As per the new textile policy the target is to achieve US$ 300 billion worth of textile
exports by 2024-25 and create an additional 35 million jobs
Cotton yarn accounts for the largest share in total yarn production; in FY17, the
segment’s share amounted to 71.66 per cent
Cotton yarn, a major segment in FY15, accounted for more than 57% share in fabric
production
Technical textiles, has been growing at around twice the rate of textiles for clothing
applications
. Textile exports witnessed a growth (CAGR) of 8.56 per cent over the period of FY06 to
FY16
India accounts for 7 per cent of global home textiles trade.
FDI of up to 100 per cent is allowed in the textile sector through the automatic route
As of September 2016, 4 per cent of the total operational SEZs in India are for Textile and
Apparel industry
FDI inflows in textiles sector, inclusive of dyed and printed textile, stood at US$ 2.47 billion
from April 2000 to March 2017.

A COMPARATIVE ANALYSIS OF INDO-EU TEXTILES TRADE RELATIONS


BETWEEN
THE PRE AND POST MFA (MULTI -FIBRE AGREEMENT) PHASE-OUT PERIOD
ASIYA CHAUDHARY1 & SABIHA KHATOON2
IMPACT: International Journal of Research in
Business Management (IMPACT: IJRBM)
ISSN(E): 2321-886X; ISSN(P): 2347-4572
Vol. 2, Issue 5, May 2014, 79-90
© Impact Journals

Independent Samples T-Test is used in order to test the formulated hypotheses and to reach to the
conclusion.
textiles trade between India with EU has significantly increased after the phase-out of MFA as
many other EU members have entered into trade agreements with India after the phase-out of
MFA.
RESEARCH METHODOLOGY: The data used for the present paper entirely depends on
secondary sources. The secondary data has been gathered from the following sources:
Export Import Data Bank- Department of Commerce, GOI.
FDI Cell, Ministry of Textiles, GOI.
European Commission’s Website
TOOLS FOR ANALYSES
In order to measure the validity of the formulated hypotheses, Independent Samples T-Test has
been used with the help of SPSS.
HYPOTHESES OF THE STUDY
The following hypotheses have been developed in order to achieve the objectives of the study:
Hypothesis 1: Null Hypothesis (H0) - There is no significant variation in India’s Textiles Export
to EU between
Pre and Post MFA phase-out.
Hypothesis 2: Null Hypothesis (H0) - There is no significant variation in India’s Textiles Import
from
EU between Pre and Post MFA phase-out.
Hypothesis 3: Null Hypothesis (H0) - There is no significant variation in EU’s FDI in Indian
Textiles Industry between Pre and Post MFA phase-out.

Indian T&C manufacturers and exporters have to incur additional cost on Non- refund of state level
taxes and duties, Anomaly in duty drawback rates; the rates are insufficient to neutralize the
incident of all duties and high transaction costs.
Indian textiles exporters are still facing trade barriers from EU. Indian exporters are
of the view that in EU the speed of liberalization is very slow especially in case of those products
where India holds a trade
interest. In the year 2007-08, Indian textiles export faced a sharp decline because of appreciation in
Indian rupee visa-vis
the USD. Since 2008, Indian textiles export continued to face decline. The main reason for this
decline was the global meltdown and economic slowdown in international market.
few items that dominate the export basket of India. Women’s outerwear accounts nearly 40% of the
total and men’s shirts accounts 20%
Brexit and India–EU Free Trade Agreement
Author(s): Amrita Roy and Somesh K. Mathur
Source: Journal of Economic Integration, Vol. 31, No. 4 (December 2016), pp.
740-773
Published by: Center for Economic Integration, Sejong University
Stable URL: http://www.jstor.org/stable/44028246
Accessed: 12-03-2018 06:44 UTC

Ecorosys (2009) has conducted an impact assessment of India-EU FTA on trade and sustainable development.
Industrial products account for more than 90% of all traded commodities between India and EU.
Industrial products define almost all exports from EU to India.
Methodology
1)The applied general equilibrium model is based on the Global Trade Analysis Project (GTAP) model
(originally developed by Hertel,1997) which is the most widely used computable general equilibrium model to
analyze trade policies.
The simulation studies estimate the effect of the India-EU FTA on GDP, exports, imports and the aggregate
welfare of the signatory countries and the rest of the world.
The GTAP model is a multi-sectoral, multi-country applied general equilibrium model. The structure of the
GTAP model is based on interrelations between regional production, consumption, and trade.
2) Export similarity index
The export similarity (FK) index, developed by Finger and Kreinin (1979), measures the similarity in exports
of any two countries to a third market. The index is based on the share of each product in each country's total
exports to a third market. The export similarity index is then calculated as the sum of the minimum values
(shares) for each product for any two countries to a third market. When the export similarity index value is close to one, it
suggests that the two countries considered are perfect competitors in the common market.
Export similarity index between India and key partners of the EU
3) Simulation results when the UK is a member of the EU
1. Simulation results excluding UK from EU.
- Scenario I: When the EU and UK negotiate to completely eliminate all trade barriers (import tariff and all non-tariff
barriers), i.e. agree to have common standards and regulations.
- Scenario II: they negotiate to be in an FTA (complete elimination of iport tariffs). but make border movement 10% more
difficult
- Scenario III: They work with the WTO applied tariff rates for their imports and make border movement 10%
more difficult.
EU-INDIA BILATERAL TRADE AND INVESTMENT AGREEMENT – STUMBLING
BLOCKS ON THE WAY TO CONSENSUS
RESEARCH PAPERS OF WROCŁAW UNIVERSITY OF ECONOMICS
Asian Economies in the Context of Globalization ISSN 1899-3192
e-ISSN 2392-0041
nr 447 • 2016

2007: Bilateral Trade and Investment Agreement (BTIA)


standstill in 2013
the level of tariffs cuts on automobiles and agricultural products, trade in generic drugs, services, investments
and regulations on public procurement
issues to be discussed: tariffs, trade in goods and services, but also more broadly to non-tariff
barriers and trade procedures, FDI, IPR, competition policy, public procurement
16 rounds and several technical meetings and discussions, standstill in 2013, In 2016
discussions have resumed.
In 2015 India was ranked as the 9th biggest trade partner of the European Union with a
share in EU total trade volume of 2.2% (2.3 and 2.1% of total import and export,
respectively).
European
Union corresponds to the 2nd import partner of India and the biggest export market
for Indian goods.
total value of merchandise EU-India trade in 2015 amounted to 77.6 bn EUR, 39.4 bn
EUR was EU import from India and 38.2 bn EUR was the European export.
Since 2000 the bilateral trade in goods has tripled in terms of value.
main contentious issues that blocked the negotiations process have included the level of
tariffs cuts on automobiles and agricultural products, trade in generic pharmaceuticals,
trade in services and investments as well as regulations on public procurement.
trade intensity index: to show the trend in bilateral merchandise trade.

The Emerging Strategic Partnership


between India and the EU:
A Critical Appraisal
Saponti Baroowa
European Law Journal, Vol. 13, No. 6, November 2007, pp. 732–749.
© 2007 The Author
Journal compilation © 2007 Blackwell Publishing Ltd, 9600 Garsington Road, Oxford, OX4 2DQ,
UK
and 350 Main Street, Malden, MA 02148, USA

The point that ought not to be missed, however, is that while continuing to engage with the EU
as a collectivity, India should increasingly capitalise on its already firmly grounded relations with
some of the major EU members.