June 14, 2018
COIMBATORE: Tirupur Exporters’ Association (TEA) on Thursday stressed the need to enter into Free Trade Agreement (FTA) with European Union, U.S.A., U.K. and Russia to face the onslaught of Chinese threat in export markets.
In a memorandum submitted to Union Textile Minister Smriti Irani personally in New Delhi, TEA said that though garment exports from China has been declining in the gradual manner since 2013, Chinese are silently entering into our border countries such as Bangladesh, Vietnam, Cambodia, Sri Lanka and off late in Myanmar, setting up the manufacturing bases.
“China, by using the advantages available to these countries with predominant EU and U.S. markets, increase the export and circumventing Indian industry growth prospects in the global market, which is a real threat for the existence of industry in our country,” TEA President Raja M. Shanmugham said.
“To face the onslaught of Chinese threat, it is of paramount importance for India to enter into FTA with EU, U.S., U.K. and Russia, CEPA (Comprehensive Economic partnership Agreement) with Australia, CECA (Comprehensive Economic Cooperation Agreement) with Canada and other promising countries,” he said.
“We wish to emphasis a point that till the agreements take place to enhance our competitiveness, we need a level playing field and for this the life line support like duty drawback at 5 per cent and ROSL (Rebate on State Levies) at 3.5 per cent should be fixed for the sustenance of exports. The major issue is if buyers once leave our country and settle in our competing countries, it is difficult to bring them back again immediately,” he added.
On Tirupur cluster, Raja Shanmugham said that TEA had set a target of Tirupur knitwear business, including both exports and domestics, clocking Rs. One lakh crore by 2020, which incidentally was fixed by none other than Prime Minister Narendra Modi, which also subscribed the Minister’s (Smriti) vision of doubling the textile industry turnover, he said.
In the last financial year 2017-18, Tirupur knitwear business reached Rs.42,000 crores, out of which the contribution of exports and domestic business were Rs.24,000 crores and Rs.18,000 crores respectively.
It is to be noted that, the exports has declined from Rs. 26,000 crores to Rs. 24,000 crores, about 7.7 per cent because of unforeseen situation faced by industry and the bottom line is hit further to implementation of GST and reduction of duty drawback by 5 per cent and ROSL by two per cent, which are strangulating the growth of exports and also affecting the employment opportunities, mainly to semi-literate women workers hailing from rural areas, he said.