New Delhi, Jan 27 (IANS) India is expected to gradually increase its market share from 5 per cent to 8-9 per cent in the EU’s ready-made garment (RMG) imports, unlocking an incremental annual export opportunity of nearly $4-4.5 billion over the medium term, a report showed on Tuesday.
The European Union (EU) is the world’s largest RMG market, with imports of nearly $84 billion (excluding trade among EU countries) in 2024, according to the report by CareEdge Ratings.
India currently exports $4.5-5 billion of RMG to the EU, holding 5 per cent share of the EU’s RMG market. Unlike India, key competitors such as Bangladesh, Turkey, Vietnam, Pakistan, and Cambodia enjoy duty-free access.
“The India-EU FTA is, therefore, critical to improve competitiveness of Indian RMG exporters. The agreement is called the ‘Mother of All Trade Deals’ because it creates a level playing field for accessing the EU’s RMG market, which is likely to reach $105 billion shortly (already at $94 billion in 11 months of CY25),” the report noted.
Once fully implemented by 2027, India will gain a 12 per cent duty advantage over China, which currently holds the largest market share of nearly 30 per cent in the EU’s RMG imports, said the report.
China is expected to lose its share in the EU’s RMG market due to the ‘China Plus One’ sourcing strategy adopted by global apparel brands and retailers.
“Additionally, socio-political uncertainties in Bangladesh may also lead apparel brands and retailers with a significant presence in the country to diversify their sourcing, thereby benefiting India, among others,” the report mentioned.
To fully capitalise on this potential, Indian manufacturers must expand their capacities to meet the expected surge in demand.
India’s increased competitiveness post-duty removal and continued favourable policy regimes in India, such as removal of Quality Control Order (QCO) on polyester yarn, the PM Mega Integrated Textile Region and Apparel (PM MITRA) park and the Production Linked Incentive (PLI) scheme, is expected to aid the sector in becoming more cost competitive and thereby grab these additional export opportunities, said the report.
--IANS
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