Knitwear exporters upset over panel caution on signing trade pact with EU

Knitwear exporting fraternity in Tirupur cluster is by and large upset over the cautioning of the ‘Department Related Parliamentary Standing Committee on Commerce’ against the speedy signing of the Free Trade Agreement (FTA) with European Union (EU).


The Standing Committee on Commerce had asked the Centre, in the wake of reports that negotiations with EU were set to conclude soon, that it should wait till the Committee’s report on the subject ‘India’s Engagement with FTAs: challenges and opportunities’ was tabled in Parliament.

“The Standing Committee’s suggestion has come as a huge disappointment for the knitwear exporters here who have been keenly looking forward for a EU-India Broad based Trade and Investment Agreement (commonly called FTA) at the earliest moment for widening of market share in that region,” G.R. Senthilvel, secretary of Tirupur Exporters and Manufacturers’ Association, told The Hindu .

It should be noted that some of the trade associations in Tirupur cluster were asking for expeditious signing of the FTA with EU considering that some of the competing countries in the readymade garment sector have been enjoying the benefits of FTAs with many nations.


S. Dhananjayan, chartered accountant and industry consultant, pointed out that FTA with EU was essential for enabling greater inroads for the apparels into that market since the import duty presently stands at 10 per cent for the Indian readymade garments in the countries falling under the EU umbrella.

“However, products from countries like Bangladesh get imported in EU nations without any duty because of FTA between the two factions. This will make the products from such countries cheaper giving them an automatic edge over the Indian products,” he added.

The Parliamentary Committee’s claim that FTAs would have deep ramifications for farmers, local industries and a few other segments of the population was ridiculed by the knitwear exporters.

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