(MENAFN- KNN India) New Delhi, Oct 1 (KNN) The Confederation of Indian Textile Industry (CITI) has expressed optimism about the Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA), which comes into force today.

The agreement is expected to boost exports of Indian textile and apparel products to EFTA member countries - Iceland, Liechtenstein, Norway, and Switzerland.

While commenting on the implications of this trade deal for India's textile and apparel sector, CITI Chairman Ashwin Chandran said,“The TEPA can serve a much bigger purpose than just expand our exports of textile and apparel items to Iceland, Liechtenstein, Norway, and Switzerland, the four member states of the EFTA.”

Chandran added,“The TEPA will complement the gains likely to accrue for Indian businesses from the free trade agreement (FTA) with the European Union, which is currently under negotiation.”

The India-EU FTA is expected to be concluded by the end of the year.

CITI Chairman said the TEPA aligns well with the goal of India's textile and apparel exporters to reduce dependence on the United States.“The TEPA will come in most handy as part of our diversification strategy,” he noted.

The US remains the largest market for India's textile and apparel exports, accounting for nearly 28 percent of sector revenue.

In the financial year 2024-25, India's exports to the US totaled nearly USD 11 billion. However, the imposition of a 50 percent US tariff on Indian goods, effective August 27, has emerged as a significant hurdle for the industry.

The recent imposition of a 50 percent US tariff on Indian goods, effective August 27, has posed challenges for the sector, making market diversification through agreements like TEPA critical.

Trade data from 2023 shows that total trade between India and EFTA reached EUR 5.54 billion, with EFTA exports to India worth EUR 2.33 billion, and imports from India at EUR 3.21 billion, driven primarily by organic chemicals, clothing accessories, and machinery.

In 2024, India was the seventh-largest textile and apparel supplier to Switzerland, accounting for 3.5 percent of Switzerland's total imports in this category, valued at USD 367.63 million. Apparel constituted about 85 percent of these exports.

According to CITI, the TEPA is expected to support Indian exporters in tapping European markets more effectively, mitigating the impact of US tariffs while promoting sustainable growth for the textile and apparel sector.

(KNN Bureau)

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