The textile and apparel industry is going through a period of renewed confidence in India because of the developments surrounding the India EU FTA due to the signals of greater market penetration to one of the most demanding and high value markets in the world. The renewed openness of Europe is being perceived as timely and strategically relevant at a time when exporters are struggling with the volatility in global trade and pressures on the US market.
The leaders in the industry think the suggested agreement may aid India to reclaim the competitiveness they lost because of unrest in tariff equality with the countries that have long enjoyed the favour of having preferential market access in Europe. Nevertheless, professionals warn that tariffs will not be the sole determinant of triumph. The actual returns will be based on the ability of the Indian manufacturers to adjust to changing buyer demands in the field of innovation, sustainability, fastness, and design capability.
Tariff Parity Restores a Level Playing Field
The removal of duties imposed on the export of Indian textile and apparel to the EU is one of the biggest benefits that are anticipated to come out of the trade agreement. Due to tariffs of about 12 per cent, there is a possibility of it being eliminated and this will enable the Indian suppliers to compete with the established sourcing centres like Bangladesh and Vietnam on the same terms.
Such shift, according to industry observers, does not necessarily imply that increased orders will be achieved but eliminates a historical drawback. European customers who are highly price-sensitive but quality-conscious, are now in a position to assess the Indian suppliers strictly on the basis of operational performance, compliance and reliability as opposed to distorted cost due to tariffs.
This is a very timely development, particularly when the exporters experience muted demand and pressure on margins elsewhere in the other major markets.
Performance Apparel Emerges as a Growth Engine
Some of the segments that can benefit most out of the agreement include the category of activewear, which is still behind the rise of apparel in the world. Performance based clothing, combining comfort, longevity and utility with a sense of fashion are increasingly popular among European based brands.
According to industry analysts, India has sneaked into a strong base in this segment. The modern processing facilities, the development of the knitting and weaving technologies, and the availability of the polyester raw materials have increased the strength of the domestic value chain. Moreover, the production capacity of garments has increased in various states achieving scale and versatility.
Buyers at Europe are however elevating the benchmark. In addition to placing competitive prices, they are requiring quicker development cycles, reduced and tighter order quantities, and further cooperation in design and innovation.
ESG and Innovation Take Centre Stage
Cost competitiveness is not as significant as it used to be, but it is not enough anymore. European brands are increasingly looking at environmental and social compliance, traceability, and responsible manufacturing practices. This implies that ESG alignment is no longer a choice but a minimum criterion to Indian exporters.
The adoption of cleaner processing technologies, less water and energy use, and open supply chains are emerging as key differentiators. Those companies that are able to provide effective sustainability credentials and reliability in quality and delivery will have high chances of obtaining long-term partnerships.
Product innovation is also very important. Buyers require suppliers to provide ideas, material expertise, and solutions that are trend relevant as opposed to taking orders.
Technical Applications Expand Export Horizons
In addition to fashion and garments, the contract is opening up to more value chain segments like technical textiles. Europe is also a significant importer of specialised fabrics that are consumed in many industries such as infrastructure, medical care and in manufacturing industries.
This is viewed as an opportunity by the Indian manufacturers especially those who have invested in the research and development and have developed sophisticated manufacturing capacities. A provision of engineered textiles will enable the exporters to spread their revenues and avoid the risks of relying on the seasonal demand of apparel.
This change is also in line with the European desire to have long term sourcing relationships based on quality assurance and technical know how.
Auto Sector Offers Strategic Opportunities
Another promising area highlighted by industry leaders is automotive textiles. Europe has among the largest automobile producers worldwide all of which would use textiles imported in their internal, safety and even functional uses.
The trade agreement may allow better access that would allow Indian companies to be more incorporated in the European automobile supply chains. This would involve following of stringent performance standards, consistency and certification requirements but the reward may be huge in terms of scale and value addition.
Execution Will Define Long-Term Gains
Nevertheless, the optimism comes with industry warning who aim conflict complacency. The contract restores competitiveness which does not ensure success. European purchasers have been reported to have a strict assessment procedure and only those suppliers capable of meeting the requirements in terms of speed, quality, innovation, and conformity will succeed.
In order to maximise the opportunity, Indian manufacturers will have to keep investing into design development, R&D, employee skills, and digital integration. Rapid sampling, quicker lead times and reliability in execution will become important distinguishing factors.
In case these issues are resolved efficiently, the trade deal might assist in rebranding India as a sourcing familiar and future-fit partner to Europe and enable a sustainable expansion in both apparel and advanced textile industries.
News Source: https://www.fibre2fashion.com/
