India To Sri Lanka Clothing Quota Zero Tariff, Small And Medium-Sized Garment Enterprises Need Help

India's highest office in Colombo announced that during the visit to Sri Lanka by Anand Sharma, Minister of Commerce and industry of India in August 2012, the Sri Lankan government had proposed the relaxation of the conditions of tariff quotas, that is, the conditions for Sri Lanka to purchase fabrics for 5 million ready-made garments exported to India every year, and to strengthen cooperation between the two textile industries, aiming at reviving the textile industry in Sri Lanka.

Anand Sharma has promised to consider these two requirements.

At present, the India government has accepted the request of Sri Lanka to relax the conditions for purchasing fabrics from 5 million ready made garments exported to India, and India is in the process of approving the necessary cancellation conditions.

The relevant notice will be released in a few weeks.

Once the India government has issued a notice, Sri Lanka will be able to export 8 million ready made garments to India in accordance with the India Sri Lanka free trade agreement with zero tariff.

According to the current ISFTA arrangement, India allows two categories of clothing quotas to export to India with zero tariff: 3 million garments need not be purchased from India, and 5 million garments can only be made from India fabrics.

Sri Lanka has been able to make full use of 3 million clothing quotas in the past few years, but the quota utilization rate of the 5 million garments is only 10-15%.

In September 6, 2012, according to India's revised SAFTA tariff system for the least developed countries, India announced a further reduction in SAFTA tariffs.

Compared to 5%, the previous tariff was 11%.

This will also promote Sri Lanka's ready-made clothing exports to India.

Sri Lanka's small and medium garment enterprises need help.

The SME sector of the garment industry in Sri Lanka is now in a weak position. It needs assistance and correct guidance to ensure full potential and become the cornerstone of many other countries.

However, the situation in Sri Lanka provides new opportunities for new investment opportunities in textile manufacturing related fields, such as in the skilled textile sector.

Textiles, such as geotextiles and medical textiles, are particularly important.

Sri Lanka's technology to enter these areas should come from foreign direct investment or through partnership.

The Sri Lankan government should provide high incentives to attract such a pioneer industry, which is completely ignored in Sri Lanka's textile manufacturing organization, Sri Lanka said.

The textile and garment industry in Sri Lanka, including leather products and footwear, has formed an important sector in the country's economic development.

The local textile sector caters to the garment export industry and domestic consumption, which is achieved through import and local production.

However, due to various factors, the field can not achieve full potential.

A hand-held textile machine industrial unit that can make sheets and rag by means of power looms has no future.

The survival of the hand spinning machine sector depends on its ability to upgrade itself to high-end fashion market products, like the recent developments in India and Bangladesh.

Hand shake

The death of the machinery industry is mainly due to the failure to pay competitive wages to employees.

Proactive behavior should attract new entrepreneurs and designers to recruit mixed products, which are priced high enough to maintain the right labor force.