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CBMs must to boost Indo-Pak textile & apparel trade
24
Apr '12
Mr. Rahul Mehta, President CMAI
Mr. Rahul Mehta, President CMAI
A lot of confidence building measures (CBMs) will need to be undertaken to realize the full potential of bilateral textile and apparel trade between India and Pakistan.

Last year, India and Pakistan agreed to establish a Preferential Trade Agreement (PTA) between the two countries. Under a PTA, tariffs on several products are charged at a lower rate compared to those applicable to items imported from other countries.

The expected phase out of Pakistan's 'negative list' of imports from India by the end of the current year would automatically lead to a Most Favoured Nation (MFN) status for India. It would, in turn, lead to a favourable climate for moving forward on a Free Trade Agreement (FTA) by eliminating duties on a large number of tariff lines.

The signing of an FTA with Pakistan, which is already a Prime Ministerial initiative, would enable India's yarn makers to import cotton of long staple variety from Pakistan. More than 90 percent of India's cotton is genetically modified Bt cotton which is of medium staple.

The FTA might also benefit the Indian apparel sector. However, to enable the textile and apparel sectors to take full advantage from the FTA when it materializes, it is essential to develop trust through CBMs between the two counties.

Speaking to fibre2fashion, Rahul Mehta, President of the Clothing Manufacturers Association of India (CMAI), said, “A great deal of CBMs will need to be undertaken before textile and apparel trade between India and Pakistan can really reach its full potential.”

Speaking about the impact of FTA on Indian textile and apparel industry, he says, “The negative impact of such an agreement will not be as severe on the apparel industry as it was in the case of Bangladesh. In fact, the greater availability of such fabrics such as wide width and denim could provide an increased sourcing base to the apparel manufacturers.”

“However, the textile industry, especially the fabric manufacturers and home furnishings players, will face some tough competition from their Pakistani counterparts,” he adds.

Fibre2fashion News Desk - India


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