India is pushing for labor-intensive textiles and apparel products to be classified as non-tariff items in the ongoing negotiations for a free-trade agreement (FTA) with the European Union (EU). 

This move comes as EU nations currently impose higher import duties, typically ranging from 10-12 per cent, on textile products, putting India at a disadvantage compared to China, the EU's leading supplier of apparel and textiles.

The seventh round of negotiations, which commenced on February 19, holds significant importance for the Indian textiles and apparel sector. This is especially true given that the EU, the US, and West Asian countries are major export destinations for Indian garments.

During the ongoing discussions, the issue of including textiles under the non-tariff barrier category has been prominently raised, signaling optimism among Indian negotiators. India's textile exports to the EU witnessed a decline from $44.43 billion in 2021-22 to $36.68 billion in FY23. In the first 10 months of the current fiscal year, India exported textiles worth $27.69 billion globally, including products valued at $7.67 billion to the EU.

India's emergence as a preferred destination for sourcing textiles, attributed to better quality products adhering to global standards, is seen as a driver for export growth. Stakeholders believe that the elimination of import duties would further stimulate this growth.

However, opinions among experts differ regarding the proposal for zero duty on textile exports. Ajay Srivastava, Founder, Global Trade Research Initiative (GTRI), highlights, merely signing an FTA may not lead to a substantial increase in India’s export of labor-intensive goods. Strengthening the product profile is deemed essential for realising significant gains, as illustrated by India's apparel exports to Japan post the India-Japan FTA, which did not witness the expected surge despite the elimination of duties.