India-EU free trade agreement has caused turmoil in Pakistan’s textile industry. The deal will provide tax-free access to Indian products, neutralizing Pakistan’s GSP+ benefits. Due to this, there is a fear of crisis in Pakistan’s exports and about 1 crore jobs.
New Delhi: There has been an uproar in Pakistan after the finalization of the Free Trade Agreement between the European Union and India. Due to this deal, there is a fear of huge loss to Pakistan’s textile and apparel sector, due to which about 10 million jobs may be at risk. The European Union is the second largest market for Pakistan’s many products including textiles and apparel. In such a situation, this ‘Mother of All Deals’ between India and the European Union has given sleepless nights to Pakistani exporters. Soon after this, now the Government of Pakistan has decided to review the impact of this agreement. Besides, talks have also been started with the European Union, said Pakistan Foreign Office spokesperson Tahir Andrabi.
hurt competition
Due to the free trade agreement, Indian exporters will get the opportunity to sell their products in Europe without tax. This will nullify the tax benefits Pakistan has been getting till now under the GSP+ (Generalized Scheme of Preferences Plus) program with Europe.
Under GSP+, 80% of Pakistan’s products, especially textiles and apparel, went to the European market without any duty. Taking advantage of this, Pakistan is exporting clothes and apparel worth Rs 5.70 lakh crore. At the same time, despite 12% tax, India is exporting clothes and textiles worth Rs 5 lakh crore. If India gets tax exemption, it is certain that Pakistan’s textile and apparel exports will be hit hard.
production cost is also high
Along with increasing competition, production cost also remains a problem for Pakistan. Compared to India, electricity tariffs in Pakistan are 25% to 30% higher. Therefore, 1 crore jobs in Pakistan are at risk due to the India-EU agreement.
commotion
– Business worth Rs 5 lakh crore, 10 lakh jobs in danger?
– Pakistan’s decision to review the agreement
Till now, clothes worth ₹ 5.7 lakh crore are exported annually from Pakistan to EU at zero tax.
India exports clothes worth Rs 5 lakh crore to Europe despite 12% tax
Now after the reduction in tariff on Indian products, Indian products will become cheaper and exports will increase.
Due to this, there is concern among 10 lakh people of Pakistan dependent on it, fear of decline in exports.