Textile quota for Sri Lanka under FTA
India will grant more concessions to Sri Lanka in the apparel and
clothing sector under the existing bilateral free trade agreement. New
Delhi has agreed to remove the present annual cap of 1.5 million pieces
of clothing per category in the sector.
India has also agreed to grant 100 per cent duty concessions on six
million pieces of apparel and clothing items permitted to be imported
from Sri Lanka as per the tariff quota agreed to between the two
countries. Tariff concession on the six million pieces was 75 per cent
so far.
Textiles ministry officials said the concessions had been agreed to
at a bilateral meeting in February this year. The revenue department was
expected to notify the concessions this week, they added.
Officials said the tariff concessions on another two million pieces
would also be increased from 50 to 75 per cent.
India allows concessional imports of up to eight million pieces of
clothing and apparel a year from Sri Lanka under the tariff rate quota.
Officials said the enhanced concessions had a rider, that the fabric
would have to be sourced from India.
Further, the present provision that imports can only be made through
the ports of Mumbai, Nhava Sheva (across the harbour from Mumbai),
Chennai, Kolkata and Cochin or through inland container depots at
Tughlakabad in New Delhi or Bangalore will continue.
Officials pointed out that the move towards more concessions was
unlikely to have any adverse impact on the domestic industry as Sri
Lanka was not able to utilise even the existing quota.
As per data available with the textiles ministry, Sri Lanka was able
to utilise only 7.3 per cent of the total quota during 2003. Of the 8
million pieces allowed to be imported, Sri Lanka's actual imports during
2003 was only 21,221 pieces. Similarly, the quota utilisation in 2002
was a mere 0.27 per cent.
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