Tirupur garment exporters pitch for separate trade pact with Britain

A free trade agreement (FTA) is paramount to boost exports, including garment exports to the UK, said A. Sakthivel, the head of the Tirupur Exporters’ Association. Although, the EU is a major destination for readymade garments, but the UK a leading market as Europe makes up 46 percent of apparel exports, of which Britain’s share is 40 percent.

Hence, garment and knitwear exporters in Tirupur are pitching for FTA with the EU, also want a separate trade pact with Britain after it voted to leave the EU.

Ashok G. Rajani, chairman of the Apparel Export Promotion Council, said that Britain’s exit would significantly dilute the relevance of the EU FTA for them. The only way to expand business in the UK after Brexit would be through bilateral talks, which would mean a fresh round of negotiations.

However, Rajani said that the approval a Rs 6,000-crore special package for the textiles and apparel sectors and steps announced by the government would help textile exporters to enter China and Southeast Asia.

The incentives would also enable exporters to price their products much better than countries such as Bangladesh and Vietnam, which had low labour costs.

While Europe is an important market for them, it is more or less saturated and they have to work to enter China and Southeast Asia in the coming years, as there will be greater penetration for high-end products there.

India currently enjoys a 12.5 percent tariff preference in the EU under its GSP (generalised scheme of preferences) programme. But the export sop would now be impacted for textile shipments to the UK.