In the last decade, countries like Bangladesh, Vietnam and Sri Lanka have overtaken India in the readymade garment market.

Bangladesh has a market four times bigger. Sri Lanka has been accorded GSP Plus by the European Union so that the island nation can export apparel to EU countries without payment of import duty. Ethiopia which is an emerging textile manufacturing nation has free trade access with the United States. At the same time, Indian apparel exports to the US are subject to a levy of 11.40 per cent.

While Indian exporters are levied import duty on yarn used to produce garments that are to be exported, countries including Bangladesh, Sri Lanka and Ethiopia levy no such duty.

Since July 2017, the rebate on state levies has been slashed from 3.5 per cent to 1.7 per cent. A percentage of the service tax component of drawback has been removed. Besides, duty drawback has been reduced from 7.5 per cent to two to two and a half per cent.

The Tirupur cluster claims rebate on state levies dues of Rs 500 crores.

Free trade agreements with the EU and a comprehensive economic partnership agreement with Canada and Australia in the apparel sector could go a long way in boosting Indian garment exports.