CANBERRA: Exporters from Tirupur have urged the Centre to expedite the implementation of the Comprehensive Economic Partnership Agreement (CEPA) with Canada and Australia.
Tirupur Exporters Association (TEA’s) President A Sakthivel and other industry representatives today met Union Commerce Minister Nirmala Sitharaman and asked the government to address export-related issues.
The sector exported ready-made garments worth $16.82 billion in 2014-15, of which garments worth $7.23 billion were exported to the European Union.
India’s main competition in the region is Bangladesh, which enjoys duty-free market in the region because of its least developed country status. It exported about $15 billion in 2014-15 to the EU market alone, more than double of Indian garment exports.
“We are confident that we could dent the market share of Bangladesh once Free Trade Agreement is implemented, ” said Sakthivel.
The Association also urged the government to conclude CEPA by September 2015, as committed earlier.
In 2013-14, total readymade garment exports from India to Canada were Rs 1,493 crore and in 2014-15 it was Rs 1,482 crore with a market share of 3.2%.
Bangladesh and Cambodia are the main competitors for India in this market as they enjoy least developed countries tariff treatment. Pakistan and Vietnam also continue to get benefits under the General Preference Tariff (GPT). India on the other hand imposes normal customs duty about 20% for exports to Canada.
“We have lost our competitiveness in Canada, as our competing countries continue to enjoy lower duty,” said the Association. CEPA could help exporters compete with these countries effectively, it added.
In 2013-14, garment exports from India to Australia was Rs 707 crore and increased to Rs 881 crore in 2014-15, a growth of 25%. “We request the minister to ink CECA with Australia by December 2015,” said the Association.
They added inclusion of European Free Trade Association (EFTA) States – Norway, Switzerland, Iceland, and Liechtenstein – from country group C to country group A and make them eligible for MEIS reward rate at 2% of FOB value of exports will help to increase India’s competitiveness in these countries.
They also stressed similarly that South American countries like South Africa, Russia, Australia and New Zealand be added under MEIS reward rate.
The cost of credit is on higher side compared to our competing countries, the Readymade Garment sector is struggling to maintain their competitiveness and loosing the market share.
Exporters also asked the government to add the sector to the under 3% interest subvention scheme.
