Garment exporters face stiff competition from neighbours

Country's garment exporters are facing stiff competition from China and other neighbouring nations due to difference in wage rates, labour laws and zero duty access enjoyed by Pakistan and Bangladesh to the EU -largest market for Indian textile exports.
"Indian garment exporters have to face competition from neighbouring countries for export of readymade garments. This is largely attributable to zero duty access to European Union (EU) available to Bangladesh, inclusion of Pakistan in GSP plus by the EU, difference in wage rates, labour laws, etc," Textiles Minister Santosh Gangwar said in a written reply to the Lok Sabha.
The EU's Generalised Scheme of Preferences (GSP) allows exporters belonging to developing countries to pay less or no duties on their exports to the EU, thereby giving them vital access to EU markets and contributing to their economic growth. The reformed GSP, which applies from January 1, 2014, focuses support on developing countries most in need.

In a double whammy to Indian exporters, the European Union gave special preference to imports from Pakistan under the GSP from January 1, 2014, allowing it duty-free access into 27 markets, while withdrawing the concessions for several Indian goods, including textiles and engineering.