India’s textile exports to Australia can be expected to increase threefold due to the recent signing of the Economic Cooperation and Trade Agreement (ECTA). It will be especially beneficial for the hosiery textile hub of Tiruppur and home furnishing hub of Panipat. India will also be able to import high quality long staple cotton duty free.
As per the ECTA, India will be able to import 3 lakh bales of 170 kg each of cotton annually from Australia duty free. This will increase the accessibility of high quality long staple cotton and provide some respite to the industry when cotton prices are on a continuous rise.
Ravi Sam, Chairman, Southern India Mills Association (SIMA), said in a statement, “It will give impetus to the Indian textile industry. Duty free export of high-quality cotton from Australia will provide relief to exporters. Thousands of jobs will be created as we will be able to export textile products with 7 to 10 times value addition.”
On the other hand, India’s total textile exports, mainly garments and home textiles, to Australia are expected to increase from the current $392 mn annually to $1.1 bn within three years, due to the deal.
Tiruppur, the largest hosiery garment production hub in South India, is likely to benefit the most from the agreement, according to sources. Firstly, the transportation cost of cotton imports from Australia to South India and exports from there will be lesser. Apart from this, Tiruppur has capability to produce high quality knitted hosiery garments at lower cost. N Jeyasekaran, director of Tiruppur-based firm Wiseman Exports told, “Tiruppur would particularly benefit from the agreement because Tiruppur has a special position in production of high quality hosiery garments at lower cost.”
Panipat, which is known for good quality carpets and floorings, is also likely to benefit from ECTA. Deepak Durga, from an export firm HM Overseas, said that home furnishings, including carpets and floorings, are already being exported to Australia, and the agreement will further boost the exports from Panipat. According to Durga, logistic cost from north India to seaports will not be a big issue as it will not increase the total cost by more than 0.15-0.20 percent.
