In the course of first-ever visit by an Indian Prime Minister to Bangladesh in a decade, Prime Minister Dr. Manmohan Singh did need to break new grounds and took the bilateral relationship to the next level, which, indeed he did, by announcing the decision of the Government of India to remove all 46 textile lines which are of interest to Bangladesh from India's Negative List for LDCs under the provisions of SAFTA, thereby reducing the applicable duty rate to zero with immediate effect. This was welcomed by Prime Minister Sheikh Hasina, who conveyed her appreciation for this major step on improved market access extended to Bangladesh aimed at reducing the existing trade imbalance.
This was, however, opposed by a number of trade bodies, including CMAI, AEPC, and Confederation of Indian Textile Industry (CITI), which spearheaded this voice of dissent. Opposing this move, CITI Chairman, Shishir Jaipuria wrote to the Prime Minister, stating, "In our view, such a policy decision needs an assessment of the likely perilous consequences on the domestic garment manufacturing and loss of employment, which the sector generates especially for unskilled female workers. This would also adversely affect the investment in complete textile value chain, which Government of India intends to promote."
Case against Concessions to Bangladesh
The basis for their opposition were numerous, but more important among them were:
According to the trade bodies, Bangladesh’s apparel manufacturing industry is far more competitive than its Indian counterpart. The in-competitiveness of Indian apparel industry against Bangladesh can be gauged from the fact that in the last 6 years (2005-2011), India's apparel exports increased by about 5% CAGR from $8.63 bn. in 2005-06 to $12.5 bn in 2010-11, against 18% growth recorded by Bangladesh’s garment exports during the same period. Bangladesh garment exports increased from $7.9 bn. in 2005-06 to $ 17.92 bn in 2010-11 and is expected to cross $25 bn. target set by Bangladesh within the next 3 years.
These organizations have contended that the products for which Bangladesh has sought concessions are also major products for our domestic production as well as consumption. Our garment industry is mostly in the small scale sector and provides employment to over 18 million workers. The upstream segments that supply raw material to the garment industry employ another 17 million workers, mostly in handloom and power loom sectors of Tamil Nadu, Maharashtra, and Andhra Pradesh. Thus, the fate of 35 million workers and a large number of SME units engaged in the production of textiles and garments in India is at stake on this issue, particularly in the garment clusters in Tirupur, Ludhiana, and West Bengal.
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This was, however, opposed by a number of trade bodies, including CMAI, AEPC, and Confederation of Indian Textile Industry (CITI), which spearheaded this voice of dissent. Opposing this move, CITI Chairman, Shishir Jaipuria wrote to the Prime Minister, stating, "In our view, such a policy decision needs an assessment of the likely perilous consequences on the domestic garment manufacturing and loss of employment, which the sector generates especially for unskilled female workers. This would also adversely affect the investment in complete textile value chain, which Government of India intends to promote."
Case against Concessions to Bangladesh
The basis for their opposition were numerous, but more important among them were:
According to the trade bodies, Bangladesh’s apparel manufacturing industry is far more competitive than its Indian counterpart. The in-competitiveness of Indian apparel industry against Bangladesh can be gauged from the fact that in the last 6 years (2005-2011), India's apparel exports increased by about 5% CAGR from $8.63 bn. in 2005-06 to $12.5 bn in 2010-11, against 18% growth recorded by Bangladesh’s garment exports during the same period. Bangladesh garment exports increased from $7.9 bn. in 2005-06 to $ 17.92 bn in 2010-11 and is expected to cross $25 bn. target set by Bangladesh within the next 3 years.
These organizations have contended that the products for which Bangladesh has sought concessions are also major products for our domestic production as well as consumption. Our garment industry is mostly in the small scale sector and provides employment to over 18 million workers. The upstream segments that supply raw material to the garment industry employ another 17 million workers, mostly in handloom and power loom sectors of Tamil Nadu, Maharashtra, and Andhra Pradesh. Thus, the fate of 35 million workers and a large number of SME units engaged in the production of textiles and garments in India is at stake on this issue, particularly in the garment clusters in Tirupur, Ludhiana, and West Bengal.
Read Full
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