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India hopeful of FTAs with EU and the US

India is hopeful of signing the free trade agreement with the EU soon. This is expected to give an impetus to exports from the country. Talks have been broken for a while but now dialogues with the European Union have been revived. India is also taking steps to get the FTA with the United States ratified at the earliest.

Apparel exporters from clusters like Tirupur want FTAs with EU and the US as most of their exports are to these two regions. The country is encouraging garment exporters to explore new markets in South America and the Middle East, among other regions. Similarly, product diversification is being promoted so that apparel exporters can penetrate niche markets across the globe.

However, India’s share of apparels made of manmade fibers continues to remain low, even as 60 per cent of the shelf space in global markets is getting occupied with garments made of manmade fibers. Perhaps the use of manmade fibers is low due to the tax structure. So there has been a suggestion to reduce excise duty on manmade fibers from 12 per cent to 6 per cent.