Textile Ministry pitches for a free trade agreement with EU.

New Delhi, October 13: The Textile Ministry is strongly in favour of a free trade agreement (FTA) with the European Union as it hopes that it would boost exports of garments and fabrics significantly and help tackle competition from Bangladesh.

“The Ministry of Textiles is in constant touch with the Commerce Ministry to pursue the proposed FTA with EU to boost international trade, specially in the textile sector,” Textiles Secretary Rashmi Verma said at a textiles and apparel conference organised by CII on Thursday.

While Bangladesh enjoys preferential treatment and tax benefits for textile exports in the EU, India has greater competitive advantage in terms of environmental compliances, the Secretary added. “As countries of the EU lay huge importance to environmental compliances, India stands to gain over Bangladesh,” she said.

Once an FTA between India and the EU is in place and exporters from India too get tax preferences, it would be easier to beat competition from Bangladesh, she explained.

New Delhi and Brussels are yet to re-start talks on the proposed FTA, which reached a stalemate almost two years back, as there are some disagreements in areas such as duty cuts on automobiles.

Verma said Indian textile industry was at a turning point. China’s export growth in textiles was decreasing and India was enjoying cost advantages, while it was also amongst very few countries which had the entire value chain existing within the country.

The fact that several states were coming out with their own policy and incentive schemes for the textile sector, augured well for the future.

Source : thehindubusinessline.com