Will CEPA review between India and Japan increase textile trade?

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Indian Trade, Industry and Textiles Minister Piyush Goyal has said he will urge Japan to review the existing Comprehensive Economic Partnership Agreement (CEPA), which was signed in 2011. Goyal is due to meet his Japanese counterpart today. Trade data shows the need for review as Indian textiles have not penetrated the Japanese market.

Goyal said he would push Nishimura Yasutosh, Japan’s minister of economy, trade and industry, to review the trade deal. Goyal was asked by reporters during his visit to Los Angeles if a Japan trade deal review was on the cards, to which he replied, “I think it’s long overdue, and I I am going to raise this issue with my counterpart from Japan, who just took over as the new minister some time ago, so I will look into this issue.

Indian Trade, Industry and Textiles Minister Piyush Goyal has said he will urge Japan to review the existing Comprehensive Economic Partnership Agreement (CEPA), which was signed in 2011. Goyal is due to meet his Japanese counterpart today. Trade data shows the need for review as Indian textiles have not penetrated the Japanese market.

Normally, when reviewing an existing trade agreement, signatory countries seek to gain better market access for their respective domestic products and address issues that create barriers to trade.

When it comes to textiles, CEPA has not worked for India over the past decade. India could not surpass even one percent market share in Japanese clothing imports. According Fibre2Fashion’s market analysis tool, TexPro, India exported $225.875 million in apparel in 2021, which was only 0.95% of Japan’s total $23.804 billion apparel imports. Japan remained too dependent on China with 58.39% ($13.878 billion) of clothing imports. Vietnam, Bangladesh, Cambodia, Indonesia, Italy, Myanmar and Thailand were ahead of India in terms of garment exports to Japan. India could only supply 1.63% of home textiles to Japan, out of its total imports of $5.307 billion. Indian exports of textile products like yarns, fabrics and fibers were also negligible.

Some trade experts, however, believe that Indian exporters are unable to meet the quality standards of Japanese buyers, which is the central problem.

Fibre2Fashion Information Office (KUL)


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