The United Kingdom has removed zero tariff incentives, and India’s over US $ 220 billion textile industry has petitioned the Government, urging it to step in as the two nations negotiate a free trade agreement.
Under the Developing Countries Trading Scheme (DCTS), which went into effect last week, New Delhi’s US $ 200 million worth of home textile and apparel exports to the UK would no longer be eligible for this benefit until 31st December 2025, but Bangladesh, Pakistan, and Sri Lanka will continue to profit from it.
“The UK has suddenly suspended preferential customs duty rates on Indian textile imports and it does not seem to be in line with the trade policy direction and when the two sides are negotiating a free trade agreement,” said a representative of the cotton textile industry.
The DCTS has taken the role of the UK’s Generalised System of Preferences (GSP) Scheme, which offered a concessionary charge of 9.6 per cent in exchange for a 20 per cent reduction on the overall import duty of 12 per cent for Indian home textiles and clothing.
The DCTS has three preference tiers: Comprehensive Preference for least developed countries, Enhanced Preference, which would keep textile and clothing items duty-free, and Standard Preference, which only includes India and Indonesia because they are not deemed “economically vulnerable” and would lose the duty preference of 20 per cent.
Textile companies raise concerns on UK lifting zero duty benefits
