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Favourable duty structure lures Raymond to Ethiopia
17
Oct '15
Raymond, one of India's leading manufacturer and retailer of fabrics and garments, is planning to invest $100 million for setting up a 2 million units per annum capacity plant in Ethiopia, according to media reports.

The company wants to build the plant in Ethiopia to manufacture and export woolen-blended and cotton-blended jackets due to favourable duty structure and local incentives.

While exporting from Ethiopia to the US, Raymond will not pay import duties of 18 per cent which it would need to pay if it exports from India. Exporting to Europe from Ethiopia would save the company another 8-12 per cent in terms of import duties while exporting to Japan would give it a preferential access. Ethiopia has a 10-year duty-free trade agreement with the US and Europe and a preferential trade pact with Japan and Raymond wants to leverage those concessions. India does not have such agreements or advantages.

The company is being provided land on a long-term lease by the Ethiopian government. Raymond will also get electricity at a price which is a third of the cost of power in India, apart from the labour charges, which are almost half of India.

Raymond is one of India's largest branded fabric and fashion retailers. It is one of the leading, integrated producers of suiting fabric in the world, with a capacity of producing 38 million meters of wool & wool-blended fabrics. (SH)

Fibre2Fashion News Desk – India

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