'Fresh look at FTA is the need of the hour to lift up garment exports'

Vietnam, meanwhile, has also signed an FTA with the EU in 2019 and is already strategising to take advantage of the benefit.
At $37 billion in 2018, apparel exports has helped its GDP grow at six per cent annually over the last decade, besides creating millions of jobs.
At $37 billion in 2018, apparel exports has helped its GDP grow at six per cent annually over the last decade, besides creating millions of jobs.

NEW DELHI: To work its way out of the current economic slump, the government needs to provide exports a boost, especially merchandise exports, amid a slackening domestic demand.

While sceptics say an export thrust is difficult when global trade is not doing well, optimists say it’s pertinent to promote garment exports as it could be single-biggest boost to jobs, beyond aiding to narrow the trade deficit.

“The government recognises the potential of the garment sector to create jobs, but lack of reforms is holding back its growth,” said Deepak Mohindra, chairman of Apparel Sourcing Week, adding the country needs reforms such as easing labour norms, reducing tariffs, and a fresh look at free trade agreement (FTA) with the European Union (EU) to be an apparel manufacturing and exporting hub.

Bangladesh offers an interesting example. In 2000, its apparel exports (at 2.6 per cent of global share) lagged behind India’s (at 3 per cent). However, a collaborative government effort and its ability to leverage duty-free access to markets such as the EU, has made it the world’s second-largest apparel exporter after China.

At $37 billion in 2018, apparel exports has helped its GDP grow at six per cent annually over the last decade, besides creating millions of jobs.

“Today Bangladesh is exporting four times more than India to the EU, whereas in the US the difference is of only 25 per cent,” he said.

Vietnam, meanwhile, has also signed an FTA with the EU in 2019 and is already strategising to take advantage of the benefit.

However, an absence of FTA remains a killer for the 6,000-odd domestic garment exporters employing 40 million workers and exporting goods worth $17 billion.

The EU accounts for a major chunk of India’s total apparel exports generating revenue of $5.4 billion in 2019 as against $4.2 billion exported to the US.

Apparel Sourcing Week 2020

 It provides a platform to manufacturers to showcase their products and manufacturing capabilities. The 3-day program will be held from Feb 20-22 in Bengaluru with an expected footfall of 10,000 attendees

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The New Indian Express
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