India allows concessions for Lankan garment exporters

The Ministry of Export Development and International Trade yesterday announced substantial concessions for Sri Lankan garment exporters under the Comprehensive Economic Partnership Agreement between Sri Lanka and India.

Under the Indo-Sri Lanka Free Trade Agreement (ISFTA), India had initially allowed imports under a Tariff Rate Quota (TRQ) of 8 million pieces of apparel products from Sri Lanka, manufactured from Indian made fabrics. In addition, there was a restriction on entry ports. In April 2007, India removed restriction on entry ports and sourcing of fabrics for 3 million pieces out of 8 million pieces at zero duty.

At the recently concluded negotiations between Sri Lanka and India, the above concessions have been expanded:

1. The 3 million pieces quota to be increased to 6 million pieces, on a duty

free basis, without restrictions on sourcing of fabrics or entry points.

2. The remaining 2 million pieces, will receive 75% Margin of Preference (MOP) without restrictions on sourcing of fabrics or entry points.

These concessions will come into force with the implementation of the CEPA.