Indian textile exporters are hoping to benefit from George Bush's re-election as US President for a second-term on account of continuity of policy.
Exporters are, however, wary of increased emphasis by Bush on regional initiatives with sub-Saharan Africa and the North Altantic Free Trade Treaty to boost the local American industry textile sector after the phasing out of the quotas on January 1, 2005.
"While the broad policies towards India won't change, President Bush is expected to strenghten his initiatives under the African Growth Opportunity Act, a programme initiated by him. Already, countries under the programme get a duty-free advantage of 17-29 per cent CIF value of imports on exports to the US.
In case John Kerry had won, the AGOA could have been put on the backburner," an industry expert said.
Officials at Texprocil are of the view that overall Indian textiles exports would benefit. "Since John Kerry was making noises about being labour-friendly, there was a possibility of action to restrict India's textile exports if he had won," a Texprocil official said.
According to Textile Secretary Wajahat Habibullah, there is likely to be an increase in the preferential trading agreements between United States and countries in South America or Turkey from where US sources its raw materials for textiles.
Habibullah told Business Standard that the textiles ministry had proposed to the Commerce and the External Affairs ministry that India should work closely with the Saarc member countries in the textiles sector to increase its share in the world market.
The United States has already initiated safeguard action in the World Trade Organisation against China in case of certain textile items like cotton trousers, pants and socks.
However, the US is not likely to take any such adverse action against India since it is not being percieved as a threat like China, and US retailers are still trying to understand the state of preparedness of India in terms of logistics, according to apparel industry experts.
Some exporters are of the view that boosting textile trade with India would not be on top of the Amercian agenda since India accounts for a mere 2.2 per cent share of United States $67 billion apparel trade.
"If Kerry had won, there would have been increased pressure on India to open up its retail market but the Bush adminsitration is more guarded," an exporter said.
Some textile manufacturers like Indo Rama do not see much changes as the policies are going to continue with re-election of Bush and their immediate concern is phasing out of quotas.
"At present, the Indo-US textile trade is low and Bush admistration will only work towards increasing this. All the concerns on restrictions on apparel raw material sourcing from Asian countries have also been ruled out with Kerry not being elected," OP Lohia, Indo Rama CMD said.
"On the other hand, the commerce ministry should have a strong stand in the WTO talks. The duty advantage which some of the African countries and South American countries have in the bilateral trade pact should be diluted and the Asian countries should look at more regional pacts to form a stronger trade block," Lohia added.
