Ludh textile industry struggles as Asian nations benefit from preferential treatment

Ludhiana: The Ludhiana textile and garment industry has been witnessing a significant decline in its exports over the past few years, due to the preferential treatment given to neighbouring Asian countries in regard to import duties.According to the stakeholders of the Ludhiana textile and garment industry, countries such as Bangladesh, Pakistan, and Vietnam have seen continuous growth in their textile and garment sectors during this period, while the local industry has suffered mounting losses.The preferential treatment in question stems from the policies of developed nations, such as the United States, the European Union and the United Kingdom, which charge little to no import duties on goods from these neighbouring Asian countries. These countries benefit from their status as: least developed or developing nations, resulting in favourable trade terms. In contrast, local exporters face steep duties, making their products less competitive in the global market, stated associations of industry.Badish Jindal, president of the Federation of Punjab Small Industries Association (FOPSIA), said this disparity has led to a steady increase in imports from the Asian countries, at the expense of local garment industryIn a letter to the World Bank, Jindal criticised the relief extended to Bangladesh, Pakistan, and Vietnam, arguing that it has shifted the global market away from local manufacturers.Jindal said if these policies are not revised, the consequences could be devastating for the industry, particularly in terms of employment. The domestic textile and garment sector is the second-largest employment provider in India, following agriculture.He said, “This sector had been growing steadily until 2017, however, thereafter, it has faced significant setbacks due to the unfavourable World Bank and WTO policies. The industry is now at risk of losing jobs due to ongoing financial struggles.”Jindal further added, “While the global demand for textiles and garments is increasing at a rate of 12.3%, export of local manufacturers is declining, in contrast to the exponential growth seen in Bangladesh, Pakistan, and Vietnam.” “There is a need to immediately halt the export assistance provided to these countries to restore trade balance and prevent further damage to the local industry. Failure to address this issue will have severe repercussions for the sector,” said Jindal. Vinod Thapar, the chairman of the Knitwear Club, said 20% import duty is charged on products imported from India, while the products manufactured in neighbouring Asian countries are 100% exempted from import duty.

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