Date:29/11/2007 URL: http://www.thehindu.com/2007/11/29/stories/2007112954590500.htm

Tamil Nadu - Coimbatore

Proposed FTA will benefit textile sector

Staff Reporter

COIMBATORE: The proposed Free Trade Agreement between India and the European Union (EU) will benefit the textile sector since a significant portion of textile exports from India was to the EU, according to industry representatives here.

The textile and clothing and textile machinery, especially specific items such as viscose staple fibre, viscose filament and circular knitting machine, should not be included in the sensitive list in the proposed agreement, they said at a consultative meeting here on Wednesday by the Confederation of Indian Industry with Ajay Srivastav, Director of Ministry of Commerce and Industry.

Viscose staple fibre and viscose filament are inputs for the textile industry here and during the last few years, the domestic industry is facing a shortage of these inputs.

The European Union was a major trading partner for textiles and significant portion of the textile exports was to the EU. So the FTA would benefit the industry, said K.V. Srinivasan, Chairman of the Southern India Mills’ Association. Indian textile goods attracted 4.5 to 13 per cent duty in the EU and currently “there is a tariff disadvantage,” he said. Several Least Developed Countries and those with Most Favoured Country status had zero duty access to the European market.

Mr. Srivastav pointed out that this was the first FTA that the country was trying to ink with a developed block. The EU comprised 27 countries and was India’s largest trading partner. The major products exported to the EU were apparel and clothing, mineral fuel, pearls, precious and semi-precious metal. The main products imported were machinery and mechanical appliances, pearls, precious or semi-precious stones and metals, electrical machinery and aircrafts.

The next round of negotiations between the working groups of the two countries would be held in Delhi from December 6 to 12. It was agreed that tariffs would be liberalised on 90 per cent tariff lines and 90 per cent of trade value within seven years from the date of FTA coming into force.