US restrictions on textile imports from China likely to augur well for Indian textile exporters: ICRA

Rating agency ICRA in its latest report has said that the US restrictions on some textile imports from Xinjiang in China is likely to augur well for the Indian textile exporters. It also said that while there were speculations of a more broad-based ban on the products originating from the region, the restrictions have been limited to a few entities, for now.

The report stated that while the immediate impact, in terms of the market catered to by the identified entities, is not quantifiable, this development could have major repercussions for the global textile trade. It said with China being the leading apparel exporter, accounting for more than 35 percent of the global trade and more than three-fourths of China's cotton originating from the Xinjiang region, any extension of the ban to a wider base in China could trigger a material shift in global apparel trade in coming years.

On September 14, the US imposed restrictions on the import of certain products originating from the Xinjiang Autonomous Region in China, citing concerns on illegal and inhumane forced labour in the region. Besides banning imports of other product categories, including hair products and computer parts, it also includes restrictions on some entities from the region involved in manufacturing apparels and producing and processing cotton. Xinjiang is a major cotton-producing belt, which accounts for an estimated 80-85 percent of China's cotton output.