Q. Consider the following statements:
Statement-I: India’s garment export market is declining compared to Vietnam and Bangladesh.
Statement-II: India imposes a high duty on imported garment raw materials.
Which one of the following is correct in respect of the above statements?

[A] Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I

[B] Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I

[C] Statement-I is correct but Statement-II is incorrect

[D] Statement-I is incorrect but Statement-II is correct

Answer: A
Notes:

Explanation –

Statement-I is correct. India’s garment exports in 2023-24 stood at $14.5 billion, which is lower than the $15 billion exported in 2013-14. From 2013 to 2023, Bangladesh’s garment exports grew by 69.6%, Vietnam’s by 81.6%, while India’s grew by only 4.6%.

Statement-II is also correct. High import duties on fabrics and complex customs regulations force the industry to rely on domestic manufacturing, leading to increased costs. India has also historically imposed import duties on raw materials used in the garment industry to protect domestic producers.

The high duties and import restrictions on raw materials (Statement-II) are directly contributing to the decline in India’s garment exports compared to competitors like Vietnam and Bangladesh (Statement-I). Therefore, Statement-II provides the correct explanation for Statement-I.

Source: The Hindu

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