India : AEPC fears Brexit will hurt Indian apparel exports

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AEPC fears Brexit will hurt Indian apparel exports

25
Jun '16

The Apparel Export Promotion Council (AEPC) expressed its apprehension over UK's exit from the EU.

Although Brexit is not expected to impact the EU FTA process or timelines, the developments in that respect will take a backseat with Britain out of the picture. With Brexit on, the only way to expand business in UK, would be through bilateral negotiations, which would mean a new set of negotiations and a longer timeline, it said in a press release.

“Britain is our largest market in the European union accounting for around 30 per cent of our exports to EU. Its exit would significantly dilute the relevance of EU FTA for us. Also, the expected volatility in the markets and currencies will be coming at a time the industry is trying to revive from a five-month decline since January this year,” said Ashok G Rajani, Chairman, AEPC.

India has been holding negotiations with the European Union to conclude a Free Trade Agreement since 2007. The apparel industry has been eagerly looking forward to the India EU FTA as the most important market expansion strategy as EU has been an important market for apparel. Though its share has come down over the years from 45 per cent to 37 per cent, due to strategic efforts at market diversification, it remains the largest market for India.

At present India enjoys a 20 per cent tariff preference in the EU under its GSP programme. It is to be seen how this gets impacted after Brexit as far as exports to Britain are concerned. It would also be interesting to see how the competition unfolds in the EU, with countries with zero duty benefit in EU also losing out with Britain's exit, the AEPC release said. (SH)

Fibre2Fashion News Desk – India

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