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India might benefit from US ban on textile imports from China : Icra

The United States has restricted imports on few of the textile imports from Xinjiang in China. This restriction is very likely to augur well for India textile exporters. On September 14, the US imposed restrictions on the imports of certain products originating from the Xinjiang Autonomous Region in China, raising worries about illicit and inhumane slave labour in the zone, rating agency Icra said in a report.

The agency said that it expects to benefit domestic textile exporters from this growth. Although there were speculations regarding a broader-based ban on goods originating from the area, the prohibitions were confined to a few individuals, it said for now. In addition to restricting imports of other commodity types, including hair products and computer equipment, this also entails prohibitions on some individuals from the area engaged in the manufacture of clothing and cotton cultivation and processing.

China is the largest exporter of textile and accounts for more than 35% of world trade and more than three-fourths of China’s cotton from the Xinjiang region. It will be a good chance for India to expands its export in the textile industry, which can help India increase its exports in other sectors as well. Several significant apparel exporters from India have either already begun receiving increased orders or are engaged in active discussions with large international buyers to increase their Indian sourcing. In light of this recent development, the shift, which had previously been expected to take place slowly over the medium term, could be expedited.

Furthermore, as seen in the past couple of years amid the ongoing US-China trade war, retaliatory actions by China could likely occur which could prevent the widening of the scope of the ban, Icra report added.

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