Indian Textile Exporters Urge Fairer ASEAN Trade Terms Amid Persistent Barriers

India’s textile industry continues to face significant trade challenges in Southeast Asia, despite a marked increase in commerce with leading ASEAN partners such as Indonesia, Thailand, and Malaysia since the implementation of the ASEAN-India Free Trade Agreement (AITIGA). According to a recent India-Exim Bank report, many Indian textile products are included on “sensitive” or “exclusion” lists by ASEAN countries, denying them duty-free access and limiting their competitiveness in these markets. While countries like the Philippines and Vietnam offer zero-duty access under AITIGA, Indian exporters have not fully capitalised on these opportunities. The report recommends renegotiating the trade agreement to secure better access for Indian products that are currently restricted and to maintain higher tariffs on certain goods to protect domestic industries. The textile and apparel sector is a cornerstone of India’s economy, contributing 1.4% to GDP, over 10% to manufacturing output, and nearly 8% to total merchandise exports in 2023–24, with export values reaching USD 34.4 billion. To enhance global competitiveness, the Indian government has launched the Production Linked Incentive (PLI) scheme, focusing on man-made fibres and technical textiles. So far, 73 companies have been selected to benefit from this initiative, which aims to boost local production and attract investment. Despite these efforts, the India-ASEAN trade deficit has widened, and Indian exporters are urging a review of AITIGA to address operational and market access barriers. The government is currently gathering industry feedback to identify and resolve issues that hinder optimal utilisation of the free trade framework.