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Expedite talks on FTAs, enhance competitiveness, says SIMA chairman

Coimbatore,  The Southern India Mills Association (SIMA) on Monday wanted the Centre to expedite the conclusion of negotiations on Free Trade Agreements (FTA) with EU, the UK and Canada and ensure a level-playing field for Indian home textiles and garments.

These products at 9.6 per cent duty in the EU and the UK and 15-17 per cent in Canada make Indian products uncompetitive as there is no duty in countries like Bangladesh, Vietnam, Cambodia, Sri Lanka and Pakistan, said the newly elected SIMA chairman Ravisam.

“Our country should explore an early harvesting programme during the pre-negotiations phase of the Enhanced Trade Partnership for zero duty and India and UAE are likely to negotiate on FTA with the Group Gulf Cooperation Council countries, the second largest destination of India, after USA, with nearly US $ 29 billion,” he told reporters here.

The agreement is likely to be concluded by March 2022 and the CEPA (Comprehensive Economic Partnership Agreement) is likely to give more opportunities to India, he said.

Though India has signed several FTAs and RTAs like ASEAN, SAFTA, Asia-specific trade agreement and also with the countries like Korea, Japan, Malaysia and Chile, the country”s exports have not increased mainly due to tariff and non-tariff barriers, logistics and external trade policies like GST, he said.

Vietnam is a huge conversion centre and one of the top exporting nations of garments with almost US $ 30 billion as countries like China, Korea, Japan, Taiwan have made huge investments in Vietnam, he said. Vietnam imported over US $ 15 billion worth of fabrics last year of which India”s share is very negligible, he said.

Ravisam said yarn from India at zero duty, except for seven HS lines, are still at 5 per cent and that the Indian fabrics are in the sensitive and excluded list with 5-6 per cent and 12 per cent duty respectively.

On the issue of the need to address duty inversion in certain segments of the textile value chain, he said the cotton value chain has become seamless and does not have much problem to be addressed except the issue of the refund of accumulated input tax credit on account of capital goods and certain services especially in the processing sector.

Ravisam further said lower rate of GST has brought high revenue and any attempt to increase the rate of tax would have an impact on handlooms, powerlooms and other decentralised/MSME sectors that account over 85 per cent of the production in the textile value chain.

He appealed to the government to bring the entire man-made fibre value chain also under 5 per GST. and also to withdraw the 10 per cent import duty on cotton, as the country has been mostly importing only 11-15 lakh bales of cotton as against the total consumption of 330 lakh bales in a year.

Earlier, Ravisam was elected as the SIMA chairman, S K Sundararaman as deputy chairman and Durai Palanisamy as vice- chairman at the 62nd annual general meeting. PTI