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India’s exports textile rise post GST

India’s textile exports have increased 6.2 per cent post GST. Even after the withdrawal of concessions under the Generalised System of Preferences (GSP), India’s apparel exports to the US have risen five per cent compared to the same period last year when the duty benefits were available. India’s leather exports to the US grew by about seven per cent in the last four months.

The US-China trade war offers huge opportunities to Indian leather exporters to raise shipments to the United States. But the country faces competition from countries like Vietnam, Bangladesh and Sri Lanka who enjoy duty free access to key markets while India faces a duty disadvantage. Besides, Bangladesh and Vietnam have the benefit of scale in apparel manufacturing and a large and productive labor force.

In July 2019 the US terminated India’s designation as a beneficiary developing nation under the GSP trade program after determining that it has not assured the US that it will provide equitable and reasonable access to its markets. The textile industry in India is subject to provisions of the WTO Agreement on Subsidies and Countervailing Measures.

India’s share in world trade in textile and clothing is estimated to be 4.95 per cent. With these exports, India is ranked second among suppliers in the world.