COIMBATORE: The Tirupur Exporters Association (TEA) has urged the Central government to announce A World Trade Organisation (WTO) compatible scheme in place of the Merchandise Exports from India Scheme (MEIS).
Following a joint meeting of the board of trade and the council of trade development and promotion, TEA president, Raja M Shanmugam has urged the industry and export councils to stop depending on crutches of subsidies and grants from the Central government and strive to make industry more competitive and self-reliant.
He said, “though the knitwear garment exporting units, 80% in MSMEs, in Tirupur are striving hard to be competitive and self-reliant, the major concern is absence of level playing field in the global market. Subsidies like the MEIS was actually introduced for offsetting the infrastructural inefficiencies faced by exports of specified goods including readymade garments to provide a level playing field. The higher logistics cost and increasing of wages compared to our competing countries are also deterrent factor in enhancing our competitiveness.”
He noted that India is competing with nations like Bangladesh, Vietnam, Cambodia, Ethiopia, Myanmar and Sri Lanka, apart from China which are all enjoying duty-free status in European Union due to enjoying least developed country status. “However, we are at a disadvantageous position. Moreover, Ethiopia is enjoying duty-free status in USA and Bangladesh and Cambodia is also enjoying duty-free status in Canada. Due to intense competition in the world textile trade, manufacturers in India are operating with wafer-thin margins,” he added.
Expressing apprehension that immediate removal of subsidy given to RMG sector at this juncture would straight lead to reduction of our competitiveness in the global market, Raja Shanmugham said once buyers left our country and settled for our competing country, then, it becomes harder to win them back.
He said, “readymade garment sector is providing more employment to the downtrodden people, that too 60 per cent are women workers and it is required to protect this industry and also cotton farmers, as the fortune of industry is linked with them directly.” In this backdrop TEA has urged the Commerce ministry to come out with an alternative WTO-compatible scheme with equal benefits until Free Trade Agreements were inked with EU, UK, and with other promising countries like Canada and Australia to help boost Indian exports.