Apparel exports to India top Rs. 1 b inclusive of Rs. 247 m worth brassieres

For the first time the value of apparel exports from Sri Lanka to India has passed Rs. 1 billion in 2010, whilst more importantly the entire duty free quota of three million pieces has been utilised under the Indo Lanka FTA, according to the Ceylon Chamber of Commerce.

The exports shipped were under HS Chapter 61 and 62, whilst the utilisation of the entire quota is as per the Textile Quota Board, according to the Ceylon Chamber’s CCC Trade Newsletter (Mar/Apr 2011 Issue).

It said that under the India-Sri Lanka FTA, Sri Lanka was given a duty free quota of up to eight million pieces for apparel exports. However, until 2008, the quota was hardly utilised due to extremely restrictive rules of origin requirements, which required the apparel to be made out of textiles of Indian origin to be eligible for duty free access.

“In 2008 as a result of negotiations Sri Lanka had with India to relax the rules of origin requirements, the rules were relaxed and concessions extended for three million pieces of apparel made out of any origin fabric. That year the quota utilisation out of the three million pieces was 800,000 pieces and in 2009 it was slightly above one million pieces. The remaining five million pieces of apparel, from eight million total pieces, get duty reductions from 75% to 100% provided the items are made out of Indian fabric,” the chamber said.

In 2009-2010, the import value of apparel imported to India was US$ 107 million.

The main supplier to India was China (32%), followed by Italy accounting for 9%. Sri Lanka and Hong Kong accounted for six per cent each and Bangladesh accounts for 4% of imports.

The biggest export in terms of value had been men’s or boy’s trousers worth Rs. 662 million. This category draws a 10% duty or Indian Rs. 135 per piece, whichever is higher.

The second largest export is brassieres worth Rs. 247 million, which faces a 10% or Indian Rs. 30 per piece duty. Other exports included women’s or girl’s trousers, parts of garments or of clothing accessories, T-shirts, singlets and other vests, sweaters, pullovers, sweatshirts, etc.