June 8, 2019
Coimbatore : Tirupur Exporters Association (TEA) has requested the Union Commerce and Industry Minister Piyush Goyal to come out with an alternative WTO compatible scheme with equal benefit of MEIS (Merchandise Exports of India Scheme) till inking Free Trade Agreement with EU, UK, EAEU.
The request comes after the remarks by Goyal that the industry and export councils should stop depending on crutches of subsidies and grants from the central government and strive to make industry more competitive and self-reliant.
Though the knitwear garment exporting units, 80 per cent in MSMEs in Tirupur, are striving hard to be competitive and self-reliant, their major concern was the absence of level playing field in the global market, TEA President, Raja M Shanmugham said in a statement today.
The subsidy like MEIS was actually introduced for offsetting the infrastructural inefficiencies faced by exports of specified goods, including ready made garments (RMG) to provide a level playing field, he said adding that higher logistics cost and increasing wages compared to competing countries are also deterrent factors in enhancing our competitiveness.
India is competing with nations like Bangladesh, Vietnam, Cambodia, Ethiopia, Myanmar and Sri Lanka, apart from China which are all enjoying duty free status in European Union due to either being least developed country status / Free Trade Agreement, with India at a disadvantageous position, he pointed out.
Moreover, Ethiopia is enjoying duty free status in USA and Bangladesh and Cambodia are also enjoying duty free status in Canada and due to intense competition in the world textile trade, manufacturers in India are operating in wafer thin margins, Raja Shanugham noted.
Expressing apprehension that the immediate removal of subsidy given to RMG sector at this juncture will straight away lead to reduction of our competitiveness
in the global market, he said that once the buyers leave the country and settle in with competing country then it would be difficult to bring them back immediately.
He said RMG sector is providing more employment to the downtrodden people, that too 60 per cent women workers and it is required to protect this industry and also cotton farmers, as the fortune of industry is linked with them directly.
Against this background, TEA has sent a requisition letter to Union Minister of Commerce and Industry to come out with an alternative WTO compatible scheme with equal benefit of MEIS till inking Free Trade Agreement with EU, UK, EAEU and other promising countries for the sustenance of exports.
The copies of letters were also sent to Prime Minister, Union Ministers of Finance, Textiles and MSMEs, he said.