Great Britainâ€™s exit from the European Union after the referendum to quit on 23 June will have marginal impact on Indiaâ€™s fibres and yarns export to that destination as it is not a big buyer. While entire West Europe accounted for less than 7% of total fibre and yarn exports in 2015-16, UK was just 0.2%. Within export to West Europe, UK was just 3%. This show that volume of trade between India and Britain.
In 2015-16, UK imported US14.7 million worth of fibres (natural and manmade) and spun yarns including filaments. This included US$8.13 million of spun yarns, US$3.44 million of filament yarns and US$3.15 million worth of fibres. During the year, it imported cotton yarn, polyester/wool, polyester yarn and acrylic yarn, each worth more than US$1 million. Among fibres, UK imported PSF and VSF during the year.
Even textile machinery manufacturersâ€™ body India ITME Society does not see any immediate threat from Brexit. According to Sanjiv Lathia, Chairman, England is not a big buyer of textile machinery. Textile manufacturing moved away from England long ago to China. He also sees not much 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. Europe makes up 46% of apparel exports, of which Britain's share is 40 per cent.
A free trade agreement (FTA) will be paramount to boost garment exports to the UK. Knitwear exporters are also pitching for FTA with the EU, also want a separate pact with Britain. India currently enjoys a 12.5% 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 be immediately picked up in the coming years.
Recently, the government had approved a INR6,000-crore special package for the textiles and apparel sectors with an aim to create 10 million textile jobs within three years.
Courtesy: YnFx â€“ Fibre and yarn Exports - India
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