FTAs with EU, US, UK, Australia, Canada to help double apparel exports in 3 years: AEPC

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July 13, 2020 3:56 PM

In a letter to Prime Minister Narendra Modi, Apparel Export Promotion Council of India (AEPC) Chairman A Sakthivel said that the industry has been very badly impacted in India's principal export markets of the US, UK and Europe due to the COVID-19 pandemic

Sakthivel said currently Indian industry has a duty disadvantage of 9.6 per cent in the EU market as compared with competitors like Bangladesh, Cambodia, Sri Lanka and Pakistan.

Implementation of free trade agreements with the US, UK, European Union, Australia and Canada would double apparel exports from the country in three years, AEPC said on Monday. In a letter to Prime Minister Narendra Modi, Apparel Export Promotion Council of India (AEPC) Chairman A Sakthivel said that the industry has been very badly impacted in India’s principal export markets of the US, UK and Europe due to the COVID-19 pandemic, and free trade agreements (FTAs) with these regions would give a significant boost to the sector.

Although the government is taking steps to revive exports, “an important area that can supplement your efforts in this direction is improving export competitiveness through a comprehensive review of India’s trade agreements through a fast-tracked mechanism with the EU, UK, US, Australia and Canada”, he said in the letter.

Sakthivel said currently Indian industry has a duty disadvantage of 9.6 per cent in the EU market as compared with competitors like Bangladesh, Cambodia, Sri Lanka and Pakistan. Recently, Vietnam also concluded an FTA with the EU, and most competitors are leveraging such FTAs in a big way to enhance their cost competitiveness, he said.

“There is an urgent need to have a level playing field in terms of market access and margin of preference in our biggest global market and to rectify the distortion that we are suffering,” he said .

Sakthivel added that an agreement with the US will have a significant impact on India’s apparel exports to America as the average tariff in the US is 12.5 per cent, and the peak tariff on certain items like man-made fibre based apparel, which India is promoting, is 28 per cent.

The US is India’s major destination for apparel exports with over 27 per cent share. The council also pleaded for a comprehensive economic partnership agreement with Canada and Australia.

“Canada was earlier a very large market for India. We lost a substantial share of our exports because our competitors entered into trade agreements with Canada. With an FTA in place, we will be able to easily recapture the lost ground,” he said, adding that with these measures India will be able to increase its exports two-fold over the next three years.

India is negotiating FTAs separately with the EU, Australia, and Canada, and a limited trade pact is under talks with the US.

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