The country's total exports of textiles and clothing in 2015-16 stood at USD 40 billion as against USD 41.4 billion in 2014-15, a marginal decline of 3.4 per cent. In the absence of adequate policy support textile sector likely to see further slowdown in outbound shipments, according to industry body.

Textile Export Promotion Council (Texprocil) Chairman R K Dalmia said in a statement that some of the issues relating to exports such as cost of funds and adverse impact of preferential access given to competing countries need to be addressed immediately.

The government needs to give greater priority to the needs of the textile sector and recognize its huge potential by giving timely impetus in terms of policy support.

Recognizing exports as priority sector for lending and including cotton yarns in the MEIS and interest equalization scheme are few other key issues that need to be addressed.

With Vietnam's textiles and clothing exports growing by 9.14 per cent and that from Bangladesh rising by 4.71 per cent last year, preferential trade agreements have been one of the major reasons for decline in India's exports, he said.

While Vietnam and Bangladesh are surging ahead, India seems to be caught in a 'discriminatory tariff' trap, thereby slowing down the momentum of exports.

India has already lost market share to Pakistan in 19 textiles and 18 clothing products during 2014 due to the preferential access extended by EU to that country under the GSP Plus Scheme.

This has happened entirely due to the duty free access given to Pakistan, while Indian exporters were paying a duty of 9.6 per cent for made-ups and garments and 6.5-8 per cent for fabric items, the statement said.

The signing of the Indo-EU FTA at the earliest would help the textiles sector gain immensely in terms of market access, according to Dalmia.