AEPC appeals for removal of duty disadvantage in UK

India's apparel export industry, which is trying to come out of global stagnation and compete globally, is falling behind several competitors like Bangladesh, Cambodia and Pakistan due to duty disadvantage of 9.6 per cent in exporting to the UK, AEPC chairman Dr A Sakthivel said in a letter to Modi.

“Total import of apparels in the UK in calendar year 2019 was $24.9 billion. Out of this, imports from Bangladesh was $3.6 billion, while it stood at $1.4 billion for India,” Sakthivel said.

He appealed to Prime Minister Modi to initiate discussions for a fast-tracked FTA. And if it is not possible to enter into an FTA, then India should urgently negotiate and conclude Comprehensive Economic Partnership Agreement (CEPA) during Johnson’s visit to attend Republic Day parade in New Delhi, Sakthivel said in the letter.

“Given the socio-economic dividends that the proposed FTA or alternatively CEPA holds for the apparel sector and the country, we request you to consider the matter for early discussions and conclusion of the same during your forthcoming meeting with the  Prime Minister of UK,” the letter said.

India enjoys strong traditional ties and good connect with UK retailers, but the exporters are facing severe competition due to duty disadvantages arising out of benefits under Generalized System of Preferences (GSP) to 47 Least Developed Countries (LDCs) including Bangladesh, which will continue even beyond Brexit in January 2021. 

“This is in spite of the fact that India has a complete value chain from fibre and yarn to fabrics and apparels, whereas Bangladesh has to import the raw materials. India is the second largest producer of cotton and manmade (MMF) fibre.

“If the issue of duty disadvantage in the UK is addressed, then we are likely to double our exports of apparels to the UK in two years' time and consequently leading to huge job creations in the country. This will create employment in the entire value chain of the apparel sector, thereby benefiting farmers and industry,” Sakthivel said.

Thanking Prime Minister for taking effective measures to bring the economy back on track, he said that while the recently announced Production Linked Incentive (PLI) will boost exports of MMF apparels, the deal with the UK will further accelerate export of medical textiles in which India has got second largest production capacity.

Most of the units operating in the apparel sector are now in the MSME category after revision in the definition of an MSME unit. Early negotiation of the FTA or alternatively CEPA will help in generating employment in and increasing exports from the MSME sector, he added.

AEPC has sent similar letters to finance minister Nirmala Sitharaman, commerce minister Piyush Goyal, textiles minister Smriti Irani, external affairs minister Dr S Jaishankar and MSME minister Nitin Gadkari.

Fibre2Fashion News Desk (RKS)