TPP may dent Indian textile and garment exports

The Trans-Pacific-Partnership (TPP), a duty free trade agreement between 12 nations, may impact the Indian textile and garment export sector negatively and put Indian textile exports of around USD 40 billion at risk over the medium term, says India Ratings and Research (Ind-Ra). The TPP member nations led by the United States (US) account for 40 percent of world trade and the deal gives them duty free access to each other, and makes imports from other countries uncompetitive. However the lack of TPP members' backward integration into yarn and fabric will constrain members from taking full benefit and hence limit the negative impact in the short-term. The impact will depend upon how fast these countries are able to set up captive capacities This may lead to an overall pricing pressure which will weigh down the garmenters' margins, said a press release on Monday. Ind-Ra currently has an overall Stable Outlook for the Textiles Sector. The key nations out of the 12 countries which India exports textile and apparels to are US, Japan and Canada. The value of India's textile and apparel exports to these three countries stood at USD 11.5 billion in FY15, which is likely to reduce due to the TPP. Courtesy: SME Times

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