Faced with a sharp decline in exports, cotton textile exporters in India want free trade agreements (FTAs) with major importing countries like the European Union, Australia and Canada to be expedited. Indian exporters are offering their cotton textiles at competitive prices. Despite this, major importers like the European Union give preferential access to Bangladesh, Cambodia, Pakistan, South Korea, Turkey and Vietnam. This severely affects shipments from India. Apart from that, there are discriminatory import duties on Indian textiles in markets like China and Canada.

India’s FTA talks with the EU are yet to be concluded and exporters want talks with the EU to be fast tracked so that preferential treatment to India’s competitors is withdrawn and cotton textiles of Indian origin are treated at par with those of other countries. The industry wants cotton textiles to be included under the three per cent interest rate subvention scheme, the product / country matrix to be recalibrated under the newly introduced Merchandise Exports from India Scheme, and funds to be released under the technology upgradation fund scheme.

Countries like Bangladesh import cotton and yarn from India to produce textiles and compete with Indian exports in developed countries. Consequently India’s cotton textile exports fell 7.39 per cent in August 2015 compared to August 2014.