India’s Textile Sector Urges Fairer ASEAN Trade Terms: Exim Bank
India’s textile industry is calling for a review of the ASEAN-India Trade in Goods Agreement (AITIGA), citing trade imbalances and limited market access as key concerns, according to a recent report by India Exim Bank.
While India has taken a cautious stance on free trade agreements, its commerce with major ASEAN economies like Indonesia, Thailand, and Malaysia has grown significantly. However, Indian textile exporters continue to face hurdles, with many textile products placed on “sensitive” or “exclusion” lists by ASEAN countries denying them duty-free access.
This restricted access has undermined the competitiveness of Indian textiles in these markets. The report also notes that while countries like Vietnam and the Philippines offer zero-duty access under AITIGA, Indian exporters have not fully leveraged these opportunities.
To address these challenges, the report recommends a comprehensive renegotiation of the agreement. It urges India to push for greater market access for its high-volume textile exports while continuing to protect key domestic industries through higher tariffs on select “defensive” goods.
The textile and apparel sector remains a cornerstone of India’s economy, contributing 1.4% to GDP and over 10% of manufacturing output. In FY 2023–24, textiles accounted for 8% of India’s total merchandise exports, valued at USD 34.4 billion.
To boost global competitiveness, the government has launched the Production Linked Incentive (PLI) scheme, with a focus on man-made fibers (MMF) and technical textiles. The program has already onboarded 73 companies and aims to scale domestic manufacturing and attract investment in these high-growth segments.
The industry’s call for fairer trade terms under AITIGA comes amid India’s broader efforts to balance trade liberalization with protection of strategic sectors.
