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FTA can encourage exports to Australia


The free trade agreement with Australia will benefit Indian garment and home textile exporters. So says India Ratings and Research.

Australia’s zero import duty access to India, which was earlier five per cent, will provide a level-playing field with exports from China, Vietnam and Bangladesh. The FTA with Australia eliminates the import duty on textile exports from India, bringing them at par with exports from China, Vietnam and Bangladesh. India’s exports to Australia contribute five per cent to six per cent to the total Australian requirement and they remain at hardly one or two per cent of total textile exports from India.

The volume of exports from India to Australia may gradually increase in 2023 and thereafter may increase further based on producer capacities. The removal of tariff barriers can increase the incentive to create value addition within the country and increase the proportion of such products in the overall export basket.

Given the economic challenges being faced by some exporting nations and the increasing need to diversify supply chains, Indian home textile/garment producers are likely to benefit. Given the slowdown being experienced by the US and Europe, this could provide partial relief along with other FTAs likely to be signed with UAE, UK, Canada and Israel.


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