The exit of Great Britain from the European Union after a referendum will have marginal impact on the export of India’s fibres and yarns to that destination as it is now emerges to be a big buyer. While the entire West Europe accounted for less than 7 per cent of the total fibre and yarn exports in 2015-16, UK was just 0.2 per cent. Interestingly, Europe makes up for 46 per cent of apparel exports of which Britain's share is 40 per cent.
In the last financial year, UK imported $14.7 million worth of fibres (natural and manmade) and spun yarns including filaments. This included $8.13 million of spun yarns, $3.44 million of filament yarns and $3.15 million worth of fibres. During the year, it imported cotton yarn, polyester/wool, polyester yarn and acrylic yarn, each worth more than $1 million. As far as fibres is concerned, UK imported PSF and VSF during the year. Even International Textile Machinery Exhibitions (ITME) Society, the textile machinery manufacturers’ body of India does not see any immediate threat from Brexit.
According to Sanjiv Lathia, Chairman of the ITME, England is not a big buyer of textile machinery. Textile manufacturing moved away from England long ago to China. He also does not foresee much of an impact on Indian textile machinery manufacturing. However, garment exporters are a worried lot. Post separation, they want a trade treaty with Britain. EU is a major destination for readymade garments with the UK a leading market.
A free trade agreement (FTA) will be important to boost garment exports to the UK. Knitwear exporters, who are also pitching for FTA with the EU, also want a separate pact with Britain. India currently enjoys a 12.per cent tariff preference in the EU under its Generalised Scheme of Preferences programme. Although Europe is a large market for India, it is more or less saturated now. But high valued added products will, in all probability, be picked up in the coming years. Recently, with an aim to create 10 million textile jobs within three years, the government had approved a INR 6,000 crore special package for the textiles and apparel sectors.