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Indian Express
a day ago
- Business
- Indian Express
India's cotton import duty cuts: Boon for industry and a message to the US
The government on Monday agreed to a long-standing demand of the textile industry to eliminate the 11 per cent duty on cotton imports, in a bid to soften the impact of high US tariffs on the labour-intensive sector, which is expected to take the hardest hit from the 50 per cent US levy. However, the calibrated relief measure to eliminate the duty until September 30 could also help ease trade tensions with the US, as Washington is the second-largest cotton exporter to India and has been pushing for broader access to the Indian market during negotiations for a trade deal. While the elimination of duty is largely aimed at addressing the challenges faced by the industry — ranging from steep US tariffs to high cotton prices — it also acts as a signal to US negotiators that India could be willing to negotiate imports of cotton from Washington, an industry executive said. New Delhi-based think tank Global Trade Research Initiative (GTRI) said that almost all of India's $1.20 billion cotton imports in FY2025 were of staple length 28 mm or above and that under the India-Australia Economic Cooperation and Trade Agreement, 51,000 MT of such cotton already enters duty-free. This means the biggest winner from India's new duty-free window will be the US, GTRI said. Import duty cut won't impact fresh orders Industry executives said the duty cut, a step that had been resisted for years, was announced during the off-peak season so that it does not impact Indian farmers, as plucking of cotton starts from October and is offloaded in the market by March. The period between October and March is known as the peak season. While welcoming the relief, exporters said that the import of raw cotton would only affect in-transit shipments, since the period of relief is too short to influence fresh orders. Seeking an extension, exporters argued that the measure could help India to retain other markets such as the UK and EU, but not the US. An analysis by the Confederation of Indian Textile Industry (CITI) said US textile and apparel imports have begun surging from countries such as Vietnam and Bangladesh. 'In June 2025, the US' textile and apparel (T&A) imports from Vietnam and Bangladesh surged significantly by 26.2 per cent and 44.6 per cent, respectively, over June 2024, reflecting strong momentum in sourcing from these countries,' CITI said. India, after a promising performance in the first quarter of 2025, witnessed a notable slowdown in T&A exports to the US. In June 2025, India's exports grew by only 3.3 per cent compared to June 2024 — much lower than its earlier growth trajectory and significantly below competitors such as Vietnam and Bangladesh, CITI said. Meanwhile, China continued to see a sharp decline in June 2025, with US imports from China dropping by 41 per cent compared to June 2024 — extending the downward trend observed since April 2025, the industry body said. India's textile sector is dominated by cotton. The cotton value chain provides direct employment to nearly 35 million people and contributes around 80 per cent to India's total textile exports. India aims to more than double textile and apparel exports to $100 billion by 2030.
Time of India
26-06-2025
- Business
- Time of India
'Pact driving up almond and machinery exports from South Australia'
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel South Australia's exports of almonds, horticultural products, machinery and citrus fruits to India have increased since the India-Australia Economic Cooperation and Trade Agreement (ECTA) came into force on December 29, 2022, said Frances Adamson AC, Governor of South Australia produces 70% of the country's premium wine, and Canberra is keen on more excise duty cuts as India is seen as an important market for the beverage."A key benefit for South Australia has been access to more Indian goods, providing more choice for South Australian businesses and consumers," Adamson and Australia are currently negotiating a Comprehensive Economic Cooperation Agreement (CECA). This is expected to further boost bilateral goods trade which was around $25 billion in FY25."India is certainly seen as an important market, perhaps more important in future than it is now, but that will depend on the outcome of the negotiations," she said on higher wine exports to ECTA, exports of Indian rice to South Australia have surged 200% and those of vehicles are up 135%."In fact, India's exports to Australia as a whole have increased 9% since the ECTA entered into force (which) is a faster rate than India's exports globally," she Australia's exports of horticultural products to India rose 15%, machinery parts increased 11%, and wine grew 23% to AUD 8.6 million after the trade pact. Australia was India's largest market for wine imports with a 33% share of the imported wine market. "Now we would love to grow that, but to grow substantially, I think would probably require reductions in excise duties," she of almonds from South Australia in the 12 months to April 2025 were AUD 21.5 million, an increase of 124%, while that of citrus fruits grew 22% to AUD 2.4 million.
Mint
21-06-2025
- Business
- Mint
FTA impact: India sees export uptick in trade with Australia, UAE
New Delhi: In a move that reflects India's policy emphasis on boosting exports through free trade agreements (FTAs), the country's trade pacts with Australia and the United Arab Emirates (UAE) are beginning to deliver visible outcomes. A sharp rise in the issuance of Preferential Certificates of Origin (CoO) to Indian exporters during FY25 signals growing utilisation of tariff concessions under the free trade pacts. A Preferential Certificate of Origin is a paper that shows where a product was made, so that it can get lower taxes when shipped to another country under a trade deal. According to a commerce ministry report reviewed by Mint, preferential Certificates of Origin (CoOs) issued under the India-Australia Economic Cooperation and Trade Agreement (ECTA) rose to 77,234 in FY25, marking a 19.1% increase from 64,864 in FY24. The momentum continued into the first two months of FY26, with April and May 2025 registering year-on-year growth rates of 13.3% and 7.4%, respectively. For Australia, 5,643 CoOs were issued in April 2024, rising to 6,395 in April 2025. Similarly, 6,125 CoOs were issued in May 2024, which rose to 6,580 in May 2025. These certificates, which allow exporters to access lower or zero duties in partner countries, saw strong growth under both the India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA) and the India-UAE Comprehensive Economic Partnership Agreement (IUCEPA), highlighting deeper integration into partner markets and increasing awareness among exporters. The steady climb reflects a strengthening trade relationship and growing awareness among Indian exporters of the agreement's benefits, particularly in sectors such as textiles, leather, gems and jewellery, and engineering goods, where tariff concessions are actively utilised. The rise was even more pronounced under the IUCEPA (UAE), where CoO issuances jumped by 24.7%, from 98,104 in FY24 to 122,306 in FY25. In April 2025 alone, 11,825 certificates were issued—35.4% higher than the same month last year. May figures followed suit, with a 28.3% increase over the previous year to 11,507. A senior commerce ministry official attributed the sharp increase to greater clarity on documentation procedures, faster processing timelines, and rising demand from UAE-based buyers for Indian products including food items, machinery, electricals, and chemicals. While addressing a press conference on 16 June, outgoing commerce secretary Sunil Barthwal said that the department is examining the impact of FTAs that have already been signed, especially as several new ones have been concluded in recent years. He noted that there is now a greater thrust on ensuring a higher rate of realisation from these agreements. The broader trend is evident at the national level as well, albeit at a more moderate pace. Across all FTAs, India issued 720,996 preferential Certificates of Origin in FY25, marking a 5.3% increase from 684,724 in FY24. The upward trajectory continued into the first two months of FY26, with total CoOs rising by 12.3% in April—from 61,400 in April 2024 to 68,939 in April 2025—and by 6.7% in May, increasing from 59,198 in May 2024 to 63,177 in May 2025, according to the report. However, the uptick under the pacts with Australia and UAE far outpaced the national average, indicating that these two trade deals are gaining relatively stronger traction among Indian exporters. The numbers mirror developments in bilateral trade. India-UAE trade stood at $84.84 billion in FY24, maintaining the UAE's position as India's third-largest trading partner. Exports to the UAE were valued at $31.61 billion, while imports crossed $53.23 billion. In comparison, India-Australia trade touched $26.4 billion in FY24, with Indian exports growing by over 10% to reach $7.94 billion, while imports stood at $18.49 billion, dominated by coal, minerals, and education-related services. Trade experts believe the trend is likely to strengthen further in the coming quarters, especially as India concludes negotiations on additional FTAs with the UK and the EU. In FY25, exports increased to $8.58 billion while imports stood at $15.53 billion, keeping the total trade at $24.1 billion. Before the signing of the trade deal, in FY23, India's exports to Australia were $6.95 billion and imports were higher at $19.01 billion, pushing the total bilateral trade that year to $25.96 billion. Similarly, India's exports to the UAE stood at $31.61 billion and imports at $53.23 billion in FY23, taking the total bilateral trade to $84.84 billion. After the signing of the trade agreement, exports rose to $35.63 billion and imports moderated to $48.03 billion in FY24, resulting in bilateral trade of $83.66 billion. In FY25, trade volumes expanded further, with exports increasing to $36.64 billion and imports surging to $63.42 billion, pushing the total bilateral trade to $100.06 billion. India currently has 13 major operational trade agreements, including FTAs, CECAs, and CEPAs, with partners such as Asean, Japan, South Korea, Singapore, Malaysia, Thailand. In South Asia, it has trade pacts with Sri Lanka, Nepal, Bhutan, and Afghanistan, and beyond the region, with Mauritius, the UAE, and Australia.
