Page 76 - New Cloth Market December 2022 Digital Edition

NEWS BRIEFS

Australian Parliament approves Texprocil Chairman Cautions about
Free Trade Agreement with India an Impending Global Recession

The India-Australia Economic Cooperation and Trade Shri Sunil Patwari, Chairman of the Cotton Textiles
Agreement (ECTA) is a landmark moment for India, as it Export Promotion Council (Texprocil), in a message
is the first such agreement for our country with a devel- to exporters has reviewed the current situation in the
oped country in over a decade. The Australian Parliament sector. Following are the key points highlighted by
has ratified the India-Australia ECTA, thereby paving the him.
way for strong bilateral trade between the two countries. A rapid deterioration in global
Major highlights of the India and Australia - Eonomic Co- growth prospects, high infla-
operation and Trade Agreement (ECTA):
tion, and worsening financial
• Duties on 100 percent tariff lines to be eliminated by conditions continue to induce
Australia. fears of an impending global
recession. The spillovers of
• It is expected that with this agreement, the total bilat-
eral trade will cross US$ 45- 50 bn in 5 years from the global slowdown are also
existing US$ 31 bn. weakening the prospects for
Indian textile exports busi-
• India’s Merchandise Exports are likely to increase by nesses. The experts in the
10 billion by 2026-27. matter feel that reasons in-
• Give a big boost to several sectors of the economy, cluding rise in prices of cot- Shri Sunil Patwari, Chair-
man, Texprocil
especially textiles. ton, increased freight costs,
high energy prices, etc. have spurred the current crisis.
• An estimated 10 lakh jobs to be created.
After any kind of pandemic, they believe, there is a re-
• Open new opportunities for the service sector in India. cession that follows and the present one may take a cou-
ple of quarters i.e. upto six months to recover.
• Immensely benefit students by offering them an op-
portunity to work in Australia. The supply chain disruptions led to delays as the Christ-
• Provide for an institutional mechanism to encourage mas deliveries came in only by summer leading to accu-
and improve trade between the two countries. mulation of inventory. Despite easing of supply chain is-
sues at a later stage, the correction in cotton prices has
• Create ample opportunities for investment, promotion
led other fibres to lower their price thus compounding the
of start-ups.
issue as retailers and factories are hastily liquidating cur-
• Around 96% of Australia’s exports are raw materials rent inventories. Also, they are not willing to place new
and intermediate products which will allow many Indi- orders or make new purchases as they prefer to wait and
an industries to get cheaper raw materials and make watch till prices stabilise.
them competitive.
Experts hope that as the inventory clears up, the orders
Key features for T&C sector: will start coming albeit with a slow third and fourth quarter

Australia has provided duty free access to India on all the and may take upto six months for order recovery.
T&C items from HS Chapters 50 to 63. The duty free ac-
Bilateral Trade deals to benefit India
cess has also been given to Shopping Bags (HS 4202)
and Quilts/comforters (HS 9404) exported from India. In line with India’s global aspirations, the country has
adopted an aggressive approach to FTA negotiations,
India has given restricted market access to Australia on
T&C items: a) In HS Chapter 63 (Madeups), there are a especially in forging economic partnerships with advanced
few HS lines in 6302, 6304 and 6309 (worn clothing) which economies. India finalised two deals this year– the India-
are placed in the Exclusion List (EL) at 10% while items UAE FTA signed on February 18 that officially entered
in HS 6310 (Other Rags) are in EL at 20%. b) As regards into force on May 1, and the India-Australia Economic
import of Raw Cotton from Australia under HS 52010020, Cooperation and Trade Agreement (ECTA), which was inked
(Cotton, other than Indian, of all staple lengths) –there is on April 2 and was ratified by Australia’s Parliament on
an Annual Tariff Related Quota (TRQ) of 3 lakh bales ap- November 22, 2022.
prox. 51 mn kgs (1 Bale = 170 kg) for ELS cotton of Min- Going forward, the year 2023 is set to be extremely busy
imum 28 mm length at zero duty. c) Some fabric lines of for Indian trade negotiators as they will engage four key
HS Chapter 54; few staple fibre/fabrics of staple fibre lines economies – the UK, the European Union (EU), Canada
in HS Chapter 55; few HS lines in Garments in Chapter 61 and the Gulf Cooperation Council (GCC). The initiation of
and 62; Chapter 58 and Chapter 59 are in Exclusion List. dialogue followed by multiple negotiating rounds will cer-

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