US-China ban & its impact on Indian Textiles


08 October 2022, Mumbai:

According to research, the US limitations on select textile imports from China's Xinjiang region augur well for Indian textile exporters. The US placed limitations/restrictions on importing some goods from the Chinese province of Xinjiang on September 14 due to concerns about using unlawful and gross human rights violations/cruel forced labor there.
The stated view here is that the anticipated move is in the larger of local textile exporters. At the outset albeit, the restrictions/limits have been put on an (SBs) a small number of companies, more visibly more far-reaching regional products' ban is in the works. It does not stop here it has an ambit of also numerous regional businesses engaged in the production of apparel/clothing and processed cotton.
According to the study, this is a thoughtful step in the direction of supply chains trying to decouple or create alternate credible supply chains out of China on the back of multiple challenges lately supply chains are posed there.
What is remarkable is as many Indian apparel/garment exporters alluded that China plus one is for real now; as a considerable exports uptick in orders is been witnessed or there are buyers who are at the start of this new upcycle of foreign clients actively negotiating to leverage the incremental degree of sourcing out of India.
According to the article research & probe as we move ahead trade experts are sanguine about this most recent development and, this is anticipated to gradually firm up in a trend as we keep delivering and cash in on the opportunity on hand. More importantly, cotton-based apparel is expected to derive continued gains as
opportunity keeps getting big currently.
Practical implications
Considering, in practice to keep expanding the prohibition going on for a long has its own set of difficulties given the existing mechanism is not sufficient condition in track & trace for sure to figure out the raw materials sourcing hub and origin which is inexplicable. The clear-cut grey area is, Xinjiang region-grown cotton will be construed as yarn or fabric for that matter in another geographical piece or nation, where it may always invite additional processing to make a piece of apparel/clothing.
That uncertainty brings in the sense of deja vu of obstacles/bottlenecks it creates over & over again in hindsight during the current US-China trade war over the period.
according to the ICRA report, Another potential incidental fallout can be China may take punitive measures that would likely block an expansion of the embargo. Whilst this geopolitical development gives elbow room to anticipate industry analysts that this demand tailwind is likely to fuel a supportive surge in Textile exports in the current fiscal year (FY).
Again on the back of a rise dryness factor in its primary cotton-producing regions and incidental crop damage from the very recent storms, drives the revision in the US estimated cotton production come down from 17.06 million bales in September to 17.05 million in this October.
News galore
We are today living in the digital age where the internet and (SMs) social media are abuzz with messages and videos calling/calling out global authorities for intervening and driving banning Chinese goods and merchandise.
What is million dollar question is: How justified Is all the above?
This has also the potential of precipitating a palpable anti-China sentiment nudging Indian buyers to in turn decline articles originating out of China igniting your sense of patriotism.
However, economists and academics are well advised to take a scientific assessment underpinning will be trade data between India & China.

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