Monday, November 29, 1999

Apparel exporters seek tweaking of FTA with South Korea

News posted by www.newsinfoline.com

New Delhi, May 17 (PTI) Indian apparel exporters have sought immediate duty elimination, instead of a steady reduction, on the top 10 garment items exported to South Korea under the bilateral Free Trade Agreement. T-shirts, shawls, scarves, cotton shirts, jackets and blazers, blouses, jerseys, shorts, skirts and silk mufflers are among the top Indian garment exports to South Korea. However, these do not enjoy the full benefit of the FTA the countries have operationalised from January 4, since their duty reduction would come in a phased manner. Under the FTA, officially known as the Comprehensive Economic Partnership Agreement (CEPA), South Korea will reduce the duties on more than 80 per cent of India''s apparel categories in eight equal annual stages. On the other hand, India will reduce duties on 89 per cent of Korean garment categories in five equal stages annually, according to an analysis done by the Apparel Export Promotion Council (AEPC). "AEPC recommends fast tracking of these items to E 0 staging category, in which duties on originating goods shall be removed in the first year," the paper said. These apparels accounted for USD 9 million, or 67 per cent of the total of USD 13.37 million worth of apparel exports to South Korea in 2008. Ironically, under the FTA, South Korea has front-loaded and fast-tracked duty elimination on items which do not contribute much to Indian exports, AEPC said. Only items such as knitted apparel impregnated, knitted apparel of wool, knitted apparel of cotton and knitted of other textile materials have been given zero duty access in the first year, which only account for USD 0.01 million of Indian apparel exports to South Korea. Presently, India has a negligible share of 0.85 per cent in the USD 3.16 billion South Korean apparel market and exporters feel India can increase its share to at least 10 per cent within the next five years through the FTA. China is the top apparel supplier to South Korea, with a share of 69.64 per cent, followed by Vietnam, which has 6.82 per cent of the market.

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