July 13, 2024

India Seeks Zero Tariff On Textiles & Apparel In FTA With EU

India is negotiating for textiles and apparels to be classified as non-tariff items in the ongoing negotiations for a free-trade agreement (FTA) with the European Union.

The EU import duties, typically ranging between 10-12 percent on textile and clothing, places India at a disadvantage with Bangladesh, which gets duty free access due to its least develop country (LDC) status

“The seventh round of negotiations with the 27-nation bloc, which started on February 19, is significant for Indian textiles and garment sector, considering that EU is a major export market,” the Mint reported.

“The issue of bringing textiles under non-tariff barrier was prominently raised during the seventh round of discussions. The talks are still on, and we are positive about it,” a source said.

India is emerging as a destination for sourcing textiles, with better quality products, adhering to global standards, driving exports growth. The elimination of import duties will further stimulate growth,” the source added.

However, experts hold differing views on the proposal for zero duty on textile exports. Mere signing of an FTA may not result in a rise in export of India’s labour-intensive goods, said

“Eliminating duties in the EU or the UK may benefit Indian exports, but for a significant increase, we need to strengthen our product profile,” Ajay Srivastava at Global Trade Research Initiative said.

“India’s export of apparel to Japan is an example. Even after eliminating duties on all apparels from day one of the India-Japan FTA, which came in force in August 2011, the expected gains did not happen,” he added.

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