With the beginning of the quota-free regime, textile and garment importers will source their merchandise from the least cost countries. This will lead to an increased competition among the exporting countries.

Against this backdrop, India needs to redress the impending issues pertaining to the textile and garment industry and overcome challenges to become globally competitive, the CII report says. The primary challenges that India faces is inadequate and poor quality infrastructure.

The study said from the month of January this year, South Asia has fast emerged as a major trade block. The region has cornered a 14 per cent share in the US market and 9 per cent of the European market. Exports to these main markets have also been growing at a steady pace.

"With abundant availability of raw materials, spinning, weaving and knitting capacity, low garment cost and an entire bouquet of knits, woven and home textiles on offer, South Asia is expected to be the major beneficiary of the safeguards imposed against China (by the US and the EU). India has the potential to lead the textile export growth from South Asia," says the CII study. The US has imposed punitive guards and the EU has levied specified quotas for three years on imports of certain clothing categories from China.

Telegraphindia.com