As Britain voted to leave (Brexit) the European Union on Friday, a silver lining seems to have emerged for Indian garment exporters, reported the Economic Times. One of India's key export oriented sector, the garment industry wants Indian government to negotiate a bilateral Free Trade Agreement (FTA) with the U.K. to increase each other's trade prospects.
Though the British pound has hit a 30 year low against the US dollar and could bleed exporters in the short run, on a long term perspective an FTA can change fortunes, believe exporters.
An FTA is an agreement that can bring two or more nations to cooperate mutually for each other's benefit, either on price or other issues, and consequently increase the trade in goods and services of each other.
At present, the U.K. imports nearly 10.60 percent or Rs. 1,11,178 crore of India's garment exports and is India's largest garment importer in the EU, according to Saktivel, president of Tirupur Exporters Association. He told the ET that an early negotiation of an FTA with the U.K. can benefit India as a first mover.
India's FTA with the EU has been hanging fire despite many rounds of negotiations. The 28-nation bloc has frequently raised concerns with regard to India's pharmaceutical, automobile or other services related practices.
The news outlet noted that the Trade Related to Intellectual Property Rights (TRIPS) has been the most vexed issue. India has consistently held up its right to manufacture generic drugs by copying chemical formulations from the branded ones owned by foreign companies. The country has often cited the compulsory licensing clause under TRIPs that allows the country to legally reproduce medicines.