Indian apparel industry has urged the Government to strike a pre-FTA preferential trade deal to remove the tariff disadvantage faced by Indian apparels in the UK, the third largest apparel market for Indian apparels after US and UAE.
Apparel exporters are of the view that India has been losing out to its competitors in the UK and initiating discussions for an early trade pact for apparels in the run-up to FTA can help the exporters.
India’s apparel exports to the UK fell 0.8 per cent to US $ 1,606 million in 2019 from US $ 1,619 million in 2018, cutting the UK’s share in India’s exports to 9.7 per cent from 10.3 per cent.
India has been facing a tariff disadvantage of 9.6 per cent as against countries like Bangladesh due to the EU’s Generalised Scheme of Preferences (GSP), which the UK plans to continue offering to the 47 least developed countries (LDCs).
It has been learnt that after the implementation of Brexit in January 2021, 47 LDCs including Bangladesh will continue to enjoy preferential trade benefits following the UK’s departure from the EU.
This will be a continuation of the disadvantage to Indian apparels in the important and potential market of the UK.
“It’s not a matter of LDCs. The point is that Bangladesh is equally competitive now and their exports have grown at 11.7 per cent CAGR during 2009-18, when our exports stagnated at 0.5 per cent. Bangladesh exported apparels worth US $ 40.4 billion whereas we did US $ 16.5 billion in 2019. It’s a labour-intensive sector and we need to ask for a special consideration in our bilateral relations with the UK,” said Dr. A. Sakthivel, Chairman, Apparel Export Promotion Council (AEPC).
He has written a letter to Commerce and Industry Minister Piyush Goyal and requested the Government to strike a pre-FTA preferential trade deal to remove the tariff disadvantage faced by Indian apparels in the UK market.