Passing of a proposed ‘zero-for-zero trade agreement could spike India's textiles and apparels (T&A) exports to the United States to $16 billion within three years, says a report by the Confederation of Indian Textile Industry (CITI).
According to this report, the agreement would eliminate tariffs, leveling the playing field for Indian exporters against competitors like Bangladesh and Vietnam, who currently enjoy preferential trade terms.
Representing 28.5 per cent of total exports between January and November 2024, the United States is India's largest market for T&A exports, as per Apparel Resources India. The country’s T&A exports to the US totaled $10.8 billion in FY24. On the other hand, India’s imports from the US totaled only $0.41 billion during the year.
Over the past five years, the US imports has decreased its exports from China significantly, while steadily increasing imports from India. However, the countries that have benefited the most from the changing US trade policies are Vietnam and Bangladesh, who have gained substantial market share.
A zero-duty regime, with safeguards for sensitive goods, would enhance India's competitiveness while maintaining balanced trade, argues CITI. They also advocate for a duty-free access mechanism with quota controls, given India's dependence on US cotton imports.
