Concession to garment exporters under CEPA agreement

12 Jul '08

2 min read

Under the Comprehensive Economic Partnership Agreement (CEPA) between Sri Lanka and India, the Sir Lankan garment exporters will be given concession while shipping their products to India. This information was made public by The Export Development and International Trade Ministry of Sri Lanka.

Initially under Indo-Sri Lanka Free Trade Agreement (ISFTA), under Tariff Rate Quota (TRQ), India had allowed import of eight million pieces of garments that were made in Sri Lanka using Indian fabrics.

However, India had already removed constrain on entry port and sourcing of fabric for three million pieces from the total of eight million pieces at zero duty in April last year.

Recently talks were held between authorities of two countries and the outcome was that, now fabric for six million pieces can be obtained from India on duty free basis instead of earlier agreement of three million pieces .

The remaining two million pieces of apparels will receive 75 percent Margin of Preference (MOP) and there will be no restriction on getting the fabrics from India. These grants will come into effect with the implementation of the CEPA.

Market observers are of the openion that bi-lateral trade between India and Sri Lanka will get a fillip to touch approximately $1.5 billion by 2012, when CEPA starts functioning completely.