CHENNAI: Apparel Export Promotion Council (AEPC) has urged the Centre for implementation of free trade agreements with the US, UK, European Union, Australia and Canada in a bid to double exports of apparel from the country in three years.
Apparel Export Promotion Council of India (AEPC) Chairman, A Sakthivel on Monday wrote a letter to Prime Minister Narendra Modi seeking a review of India’s trade pacts with these countries.
In his letter, Sakthivel cited that the industry has taken several hits due to the COVID-19 pandemic and business in principal exports markets like US, UK and Europe have been affected.
“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. AEPC said if disadvantages in trade pacts are removed and positive sentiment leveraged, the exports will see significant growth.
Sakthivel stressed that the present scenario of apparel exports is that India has a duty disadvantage of 9.6 per cent in the EU market as compared to competitors like Bangladesh, Cambodia, Sri Lanka and Pakistan. Recently, Vietnam has also concluded a Free Trade Agreement (FTA) with the EU and most competitors are leveraging such FTAs in a big way to enhance their cost competitiveness.
"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," said AEPC’s chairman.
The council claimed that an FTA with the US will have a significant impact on the sector as while the average tariff of USA is 12.5 per cent, on certain items like manmade fibre-based apparel, which India is promoting, has a peak tariff of 28 per cent. The USA is India’s major destination with over 27 per cent share. Similarly, the council has also pleaded for a Comprehensive Economic Partnership Agreement (CEPA) with Canada and Australia.