Indian apparel exporters are exploring opportunities in Iran. They see Iran as a good market for knitwear exports, especially polyester garments. India is one of four countries allowed to trade with Iran.

Meanwhile Indian exporters have expressed their concern over the plan to withdraw the Merchandise Exports from India Scheme. This is an incentive scheme to promote exports, and provides duty credit scrip to compensate the duty paid by the exporters, but has been challenged by countries like the US at the World Trade Organization. Exporters hope an alternative scheme is devised. The country faces competition from Bangladesh and Sri Lanka which have competitive manufacturing costs and enjoy duty free access to major markets like the EU. So some garment units have set up units in Ethiopia due to zero duty access for Ethiopian exports in the US and the EU and due to incentives being offered for investments there.

India’s apparel exports fell by 1.2 per cent in fiscal year ’19 from fiscal ’18, which in turn was four per cent lower than the previous year. The share of apparel exports in the country’s total textile exports fell from 51 per cent in fiscal ’17 to 45 per cent in fiscal ’19.