Withdrawal of duty benefits under General Preferential Tariff scheme by Canada to Indian garment exporters after January 2015 would impact domestic shipments to the North American country, Tirupur Exporters Association (TEA) said today.
In a letter to Commerce and Industry Minister Nirmala Sitharaman, TEA President A Sakthivel has asked the government to discuss the restoration of the General Preferential Tariff (GPT) after January next year.
"We request the minister to kindly take necessary steps immediately and help to continue to get GPT after 1st January 2015. It is also a right time to take efforts to have a Free Trade Agreement with Canada mainly to recapture and increase our exports to Canada," Sakthivel said in the letter.
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Canada has proposed to withdraw the entitlement to the benefit of the GPT to 72 countries, including India.
The North American country took this decision after these 72 countries were classified as "high income" or "upper middle income" countries by the World Bank for two consecutive years or, have had a share of equal to or greater than one per cent of world exports for two consecutive years.
Sakthivel said India's competing countries like Pakistan and Vietnam continue to avail the duty benefits under GPT.
He noted that Vietnam, which was exporting less than India, has now increased its exports by two times and also showing a steady growth rate, whereas India's exports have come down by 31 per cent, he said.
"Our apprehension is that once the normal customs duty at 18 per cent is imposed for our knitwear garments in Canada, then we will be straight away loosing our competitiveness in Canada, as our competing countries continue to enjoy the lower duty. The concern is the promising market will go out of reach for knitwear garment exports," he added.
"We were doing a significant amount of exports to Canada, a promising market earlier, and over the period of years, our exports have come down drastically and we are now doubtful about our survival in the huge Canada market after loosing the competitiveness," he said.
