Niti Aayog CEO Amitabh Kant on Thursday said it is “extremely important” for the India-EU free trade pact to be ratified at the earliest as countries like Bangladesh and Vietnam already enjoy preferential access to European markets.
Kant also said the global suppliers will otherwise start looking at other avenues for sourcing as China was slowly ceding ground in the apparel space.
The proposed free trade agreement has been in works for long as the two sides are yet to bridge substantial gaps on crucial issues. Addressing an event organised by apparel exporters' body AEPC India, Kant said, “Countries like Bangladesh and Vietnam are having preferential access in European markets and hence it is extremely important that we get the FTA with Europe ratified at the earliest.
“As far as Indian apparel exports are concerned, India is heavily reliant on cotton and we need to see how we can move to man-made fibres which can help us to garner more global share.”
Kant, CEO of the government think-tank NITI Aayog, acknowledged there has been a reduction in the benefits for the industry after GST rollout.
“We are looking at ways through which we could bring it at par with the rates prevalent in the previous regime. For the benefit of the industry, the central and state levies should be refunded and the government will work with the industry to resolve this issue,” he said.
Kant said it is important to resolve the issues like blocked taxes and refund of GST, and exchange rate related concerns to bring back the apparel export and manufacturing sector onto a growth path.
He further said a huge opportunity exists for India in the global apparel space with China moving out of the sector.
“China has started moving out of the apparel sector and there is a huge opportunity for India. Today the wages in China are 2-3 times that of India and given the aging population of China, the cost of apparel manufacturing will continue to rise there,” Kant said.
AEPC chairman HKL Magu said as India is gearing up to move towards WTO-compatible, production-based subsidies from export-based subsidies, it becomes extremely important that the country positions itself strongly as a responsible sourcing destination.
“At the UP Investor's Summit, we have signed a MoU with the UP government to construct an apparel city in 200 acres on Yamuna Expressway.” Magu said.