CHENNAI: The Apparel Export Promotion Council (AEPC) has urged the Centre to expedite free trade agreements (FTA) with high potential markets such as the European Union, UK, US,Australia and Canada which could lead to exports doubling in three years’ time.
In a letter to Prime Minister Narendra Modi, AEPC chairman, A Sakthivel said that India’s principal export markets, including the US, the UK and Europe, were badly impacted due to the pandemic. Seeking a review of India’s trade pacts with these countries, Sakthivel pointed out the recently, Vietnam, too, concluded a FTA with the EU and most competitors were leveraging such FTAs in a big way to enhance their cost competitiveness. “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 EU, UK, US, Australia and Canada,” he wrote in the letter.
The Council pointed out that Indian apparel exports have a duty disadvantage of 9.6 per cent in the EU market as compared to competitors like Bangladesh, Cambodia, Sri Lanka and Pakistan. Most of these countries get duty concessions under schemes such as Generalised System of Preferences.
“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,” Sakthivel said.
An FTA with the US, which has a 27 per cent share in India’s total garments exports, may have a significant impact on India’s apparel exports to the country as on certain items like MMF-based apparel, which India is promoting, there is a peak tariff of 28 per cent. The council also sought CEPA with Canada and Australia.
‘FTAs with EU, UK, US, Australia crucial’
Garments is one of the top export items from India. According to AEPC estimates, exports have plummeted 91 per cent and 66 per cent in April and May respectively due to the pandemic. With the bilateral free trade pacts in place, India will be able to ramp up exports significantly.