RCEP: Why is Gujarat's textile industry worried about China's 'dumping'?

RCEP
Credit: Times Of India 

The Indian textile industry and especially the textile industry of Gujarat are deeply concerned by the agreement that China and other countries export their textile products to India. 


Many people of Surat's textile industry have written a letter to Prime Minister Narendra Modi opposing this move.

Actually, India is going to enter into an agreement with 15 countries, including China, for free trade under the Regional Comprehensive Economic Partnership ie RCEP.

This industry is already facing economic slowdown and if India signs it according to the RCEP norms, then it will really hurt the textile industry of Gujarat.
RCEP
Credit: Business Standard
It is noteworthy that the textile industry provides direct employment to 4.5 crore people across the country, while indirectly the livelihood of about 6 crore people depends on it.

21 per cent of the people in the country are employed, while its share in the country's GDP is also about 2%.

This sector, which provides employment to millions of people, is already in the grip of economic slowdown.
RCEP
Credit: The Doller Business

What is RCEP?

There are 16 countries in the Regional Comprehensive Economic Partnership ie RCEP. It consists of ten FSI countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam) along with six FTA partners (India, China, Japan, South Korea, Australia and New Zealand).

The group is headed by Surjit Bhalla, who has been a member of the Prime Minister's Economic Advisory Committee. They say that this will keep the rupee stable as well as reduce customs and corporate tax.

These 16 countries in the Asia-Pacific have a third of global GDP. If this is successful, RCEP will become a market of 3.4 billion people.

These countries, which contribute 25 per cent of the world's GDP, have a 30 per cent share of world trade.

RCEP is a free trade agreement and if implemented, the countries involved will be able to trade with each other without any customs duty.

RCEP was formed with the aim of increasing trade across the world, but according to experts there is some ambiguity about it and that is why there has been panic in other industries including textiles.

Ashok Jeerawala, president of the Gujarat Weavers Association, says, "The RCEP agreement is the exact opposite of the Make in India concept. If this agreement comes into force then the local textile industry will be ruined."

He says, "The biggest threat to the Gujarat textile industry after RCEP will be from China as it will dump its cheap products in India which will destroy the local industries here."
RCEP
Credit: Business Standard.com

Why is Gujarat textile industry worried?

Experts believe that the Gujarat textile industry is already experiencing economic slowdown and in such a situation, if the acceptance of RCEP in its present form will break the back of this industry. China is known worldwide for dumping its cheap products and the world does not know how the industry works in China.

It is known by all that China adopts new technology very fast and produces them on a large scale to make its products cheap. There is a concern in the textile industry of Gujarat with this specialty of immediately adopting new technology for its industry.

If China gets permission to dump its cheap products in India, then it will bring disastrous results for the industry here which is facing lethargy.

Regarding the RCEP and China's dumping policy, Jeerawala says, "In China, the government helps create infrastructure for industry. Clusters are built for industries there. There are cheaper workers available than in India and they are less Can work at low cost.

Most of their units are in the formal sector and they are far ahead of us in adopting new technology. "

Says Jeerawala, "All these things have made it easier for Chinese industry to make cheap products. It helps them to export at very competitive prices. Even after all the costs, when China products are in India They are cheaper than household items. "

He says, "Our wages are expensive here and other expenses are also higher here than in China. Because of this, local products become expensive."
RCEP
Credit: The India Express
Jariwala raises the question, "Now consider the dangers. If the government accepts RCEP thinking that customers will get cheaper products, it is an irony. If such imports would force the local units to shut down And people here are unemployed, so how will they be able to buy these cheap products. "

Meena Kavia, a member of the Gujarat Chamber of Commerce Working Committee on potential threats from China, says, "The duty on import-export among all RCEP member states will be reduced to almost zero or to a great extent. There will be an opportunity to dump its cheap products in the Indian market, which will be a problem for local products. China's textile industry is largely But it is competitive with production and at the same time the Chinese government also takes interest in promoting industries. "

"China exports readymade polyester shirts to European countries for $ 2.5 to $ 3 per piece, while in India its fabric costs only $ 2 to $ 2.5 per shirt. If China has no duty duty in India If there is an opportunity to dump the products, it will definitely harm the local textile industry. "
RCEP
Credit: Business Standard

What is the condition of textile industry of Gujarat?

Haribhai Kathiria is the owner of Sahajanand Textile Company based in Surat. Regarding the current textile industry of Gujarat, he says, "The textile industry of Gujarat is currently facing costs on electricity bills, costs on additional wages, workers' strike and lack of infrastructure. If RCEP was imposed on us, Then we will be forced to close our factory. "

At the same time, Ashok Jariwala says that, "According to an estimate, 8.5 to 9 lakh looms used to work in Gujarat, but after GST their number fell to 6.5 lakhs. After the implementation of GST, many owners costing one lakh rupees. Sold his loom for a mere 15 thousand rupees. "

He says, "Gujarat does not have a single window system for the industry nor is it of doing business, it is harming the development of the state. So if RCEP is implemented, not only Gujarat but the entire country Will have an adverse effect on the textile industry. "
RCEP
Credit: fiber2business.com

What is the condition of textile industry of Gujarat?

Haribhai Kathiria is the owner of Sahajanand Textile Company based in Surat. Regarding the current textile industry of Gujarat, he says, "The textile industry of Gujarat is currently facing costs on electricity bills, costs on additional wages, workers' strike and lack of infrastructure. If RCEP was imposed on us, Then we will be forced to close our factory. "

At the same time, Ashok Jariwala says that, "According to an estimate, 8.5 to 9 lakh looms used to work in Gujarat, but after GST their number fell to 6.5 lakhs. After the implementation of GST, many owners costing one lakh rupees. Sold his loom for a mere 15 thousand rupees. "

He says, "Gujarat does not have a single window system for the industry nor is it of doing business, it is harming the development of the state. So if RCEP is implemented, not only Gujarat but the entire country Will have an adverse effect on the textile industry. "
RCEP
Credit: Business Line
Gujarat as Textile Hub
The textile industry of Gujarat has a special place in the country. Gujarat is known by the surnames of Manchester of East, Textile State of India and Denim Capital.

The textile industry here is considered not only a state but also a national pride. To understand how this is so important, it is important to know the contribution of textile sector in the country's economy.