India’s readymade garment industry will continue to get duty benefits till 2019 in the EU markets under the European Union's scheme of generalised tariff preferences. The EU has recently announced its scheme of generalised tariff preferences for the next three years (2017-19). GSP was scheduled to end on December 31, 2016.

Under the scheme, India's readymade garment sector will continue to enjoy 20 per cent duty preference on exports for the next three years in EU markets. The EU is India’s largest market for textiles. Demand from Europe accounts for almost 41 per cent of the country’s garment exports.

Currently, while Indian mills have to bear an export duty of 9.6 per cent for supplies to Europe, those in competing countries like Bangladesh and Pakistan have zero-duty access to that market. Indian apparel exporters work on very thin margins. But now, with the availability of tariff preferences and with Chinese textiles becoming uncompetitive due to rising labor costs and Bangladeshi textiles facing quality issues, they are hopeful that exports from India can surge.

What textile exporters are looking forward to is a rate subvention of three or four per cent. This, they feel, can help them compete in the export market better.