Saturday, 29 October 2016

Textile Ministry Supports Free Trade Agreement with EU


India Free Trade Agreement with EU

The Indian textile ministry sees the Free Trade Agreement (FTA) with the European Union (EU) as one of the most promising measures to boost exports. It is for this reason that it is in talks with the Commerce Ministry to urge the closing of this agreement. It is speculated that once the FTA is implemented, it will help increase the export of fabrics ,garments as well as Home textiles and will help in dealing with the increasing competition with Bangladesh & China. This, teamed with China’s downtrend in export growth will help India regain or improve its original position in the arena of textile exports.

Textiles Secretary, Ms. Rashmi Verma confirmed the news and said, that the ministry wishes for the Commerce Ministry to seek the implementations of the FTA with EU. Apart from the textile industry this move will also help in boosting the overall international trade from India.

Present at theCII’s textiles and apparel conference, Ms. Verma further added the fact that India has an edge over Bangladesh & China with respect to environmental compliances, an aspect which holds a significant importance in most of the deals closed by EU. This will help India overcome Bangladesh’s advantage of tax benefits and preferential treatment for exports. She said that, given China’s current position of decreasing export growth of textiles, the FTA is likely to put India at an advantage, given the cost advantage. This will in turn help India establish a stronghold in the international textile trade.

At present Bangladesh, Ethiopia and Kenya enjoy a duty free access in the EU, whereas exports from India attract a duty as heavy as 9.5%. In a bid to offset this limitation, the government is also in talks regarding a proposal which will offer access to automobiles and wine imports from EU in lieu of free access to Indian Textiles.

The negotiations regarding the FTA reached a moot point approximately two years back due to certain disagreements on duty cuts on automobiles, however the Commerce Ministry is all set to re-initiate the talks anytime soon!