Coming as a relief for the country’s garment industry, India will for now continue to be a beneficiary of trade preferences under the European Union’s Generalized Scheme of Preferences. The benefit under Section 11 (b) of EU’s Generalized Scheme of Preferences, which according to a previous decision, was scheduled to come to an end on December 31, 2016, has been extended by three years for the apparel segment. India will, hence, continue to enjoy 20 per cent tariff preference on exports for the next three years, ie, from 2017 to 2019. However, the fabric and yarn segment have not been as lucky and they are now out of this list. The removal of the textile sector comes in the wake of the rise in exports of textile over the allotted 14.5 per cent of the threshold.
The extended trade preference to the garment segment is expected to benefit the country’s apparel sector to a great extent, even as it struggles to meet competition from GSP –zero tariff benefit holders like Bangladesh. An additional advantage is that China has been removed from the list of beneficiaries, giving Indian products with duty preference an edge over its competitors in the European market. Currently, India’s apparel export to EU alone comprises 36 per cent of the industry’s total exports. Pleased with the move, AEPC Chairman Ashok G Rajani said, “Our endeavor now is signing of FTA with EU as early as possible.”