Textile industry leaders have urged the central government to get the Generalized System of Preference (GSP) from the European Union (EU) for inclusion of Indian textile products as Pakistan exporters are re-exporting the textile products imported directly or indirectly from country’s largest man-made fabric (MMF) hub Surat to EU due to its inclusion in the GSP in 2014, according to experts in the MMF sector.

As per an estimate, textile fabrics to the tune of over Rs 4,000 crore from India, especially Surat, land in Pakistan from direct and indirect channels. Sources said that textile fabrics, especially saris and dress materials, manufactured in Surat, reach Pakistan via Dubai, Bangladesh and Sri Lanka.

In 2014, the European Union included Pakistan to the list of GSP, which allowed duty-free access to EU markets for textile exports. Consequently, exporters from Pakistan are now able to ship fabrics, made-ups and garments with no tariffs.

On the other hand, Indian exporters, however, pay 9.6% export duty for made-ups and garments, and 6.5-8% duty on fabric items, making exports from India more expensive which has resulted in India losing around 37 textile productions, including fabrics and garments, in the EU to Pakistan.

According to textile industry expert Ashish Gujarathi, textile sector is seeking for a major boost from government policies. First, the government should impose duty levy on imports of fabrics from China and secondly, efforts should be made to get GSP status in EU to boost textile exports of India.

As per the export figures available from April-February-2016, Pakistan is the third largest market for India's MMF textile export with a share of 9 percent. UAE and the USA are top export markets at 13 percent and 10 percent respectively. During the April-February 2016, the overall export of MMF textiles stood at $41 billion.