Apparel Export Promotion Council (AEPC) seeks talks on preferential trade agreements with UK before Brexit implementation to boost exports

India should initiate talks on preferential trade agreements with the UK to reduce customs duty on certain goods before the final implementation of Brexit, as urged by the Apparel Export Promotion Council (AEPC) to boost exports and provide a level playing field for domestic players in the UK.
 
UK is India’s third largest trading partner after US and UAE and after the proposed implementation of Brexit in January 2021, it is very likely that India’s apparel  export may face the competition from other neighboring countries like Bangladesh who will continue to take the advantage under EU’s Generalised Scheme of Preferential (GSP) trade for least developed economies (LDC’s).
 
AEPC Chairman, A Sakhtivel said in a written letter to Commerce and Industry Minister Pitush Goyal, “It’s not a matter of LDCs. The point is that Bangladesh is equally competitive now and their exports have grown at 11.7 per cent CAGR (compound annual growth rate) during 2009-18, when our exports stagnated at 0.5 per cent.”
 
The apparel exports of Bangladesh, worth USD 40.4 billion outperformed India’s exports at USD 6.5 billion in 2019, which is remarkable and can’t be ignored.  As its a labour intensive sector it demands a special consideration in trade negotiations between India and UK. 

Provisions of preferential trade pact enable two counties to slash the custom duties on certain goods to reinforce trade ties. The agreement will certainly help remove the tariff disadvantage of around 9.6 percent faced by Indian apparel against Bangladesh.

Cover image by The News Minute

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