No Subsidies! Industry urges for alternative WTO compatible scheme in lieu of MEIS

by Apparel Resources News-Desk

08-June-2019  |  3 mins read

Following the recent statement made by Union Minister of Commerce, Piyush Goyal, wherein he asked the industry and export councils to stop depending on the crutches of subsidies and grants from the Central Government and strive  to make the industry more competitive and self-reliant, industry has come forward and voiced their views.

Tirupur Exporters’ Association (TEA), a leading body of the apparel industry, has urged for an alternative scheme to the Merchandise Exports from India Scheme (MEIS) with equal benefit.

Subsidy like MEIS was actually introduced for offsetting the infrastructural inefficiencies faced by exports of specified goods including apparels to provide a level playing field. It is a fact that enhanced competitiveness is mainly needed to sustain in the global market.

Elaborating further, Raja M Shanmugham, President, TEA, said “We have requested the minister to come out with an alternative WTO compatible scheme with equal benefit of MEIS for the growth of industry. It is of paramount importance to provide the required infrastructure facilities in the respective clusters of the country, apart from inking FTA with EU, UK, EAEU, CEPA with Canada, CECA with Australia and other promising countries for the sustenance of exports.”

India has been already relegated to 6th rank in the global apparel exports with a global market share of 3.9 per cent whereas Bangladesh and Vietnam enjoy the second and third position with the market share of 7.9 per cent and 5.2 per cent, respectively.

The immediate removal of subsidy given to the apparel sector at this juncture will straightaway lead to a reduction of India’s competitiveness in the global market.

Leading apparel manufacturing countries and India’s competitors like Bangladesh, Cambodia, Sri Lanka, Pakistan and Ethiopia enjoy 0 per cent customs duty to EU whereas India pays 9.1 per cent, which makes it uncompetitive.

In India, apparel manufacturing has more than 80 per cent units in SMEs, providing the largest employment next to agriculture. Apparel manufacturers, especially exporters,are of the view that the Government can’t take the risk to lose employment. “Apart from apparel manufacturing where are the jobs, so Govt. has to support apparel manufacturing, no matter how they do it,” says Narinder Pal Singh, MD, Nancy Krafts, Delhi, a veteran of Indian apparel export industry.

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