The move has scuppered the chances of anti-dumping duties on PTY exports of leading players like Reliance Industries Ltd (RIL) and Indo Rama Synthetics. The European Commission is expected to formally announce the cancellation of dumping probe into PTY exports from India soon, said industry sources.

"Since the complainant has withdrawn the petition, EC will soon be announcing the termination of the investigation. The strong presentation the Indian companies made at the EC headquarters at Brussels last February may have forced the complainat to make a quick turnabout," said industry sources associated with the matter.

The European Commision had begun investigation in November last year after a formal complaint by CIRFS alleging dumping of PTY in European markets byIndian and Korean players. The EC officials were in India early this year to inspect the data of the sample companies. Apart from RIL and Indo Rama four other yarn makers were brought under the probe. RIL, Indo Rama Synthetics and Modern Petrofils account for nearly 60 per cent of the total exports.

A formal presenataion was made to the European Commission on February 24 by the Indian companies countering the dumping claims. The Indian companies argued that allegations are irrelevant due to absence of product similarity with European players and their high manufacturing cost.

There is no product similarity per se as Indian companies primarily export commodities in contrast to the European players' focus on value-added items. Moreover, price comparison is irrelevant as sales and profitability of European companies by and large remain unaffected, industry sources said.

Incidentally, despite dumping allegations, texturised yarn exports during April-December to the European Union was higher at 120,00 tonnesas compared with 10,000 tonnes during the same period last year. However, during April-December 1998, price was lower at $18 million against $21.45 million during the same period last year.

European manufacturers suffer from certain cost disadvantages due to inherent inadequacies in the system. Those companies which import raw material at cheaper rates enjoy a cost advantange. Moreover, some European companies are still using the relatively costlier raw material dimethyl terepthlate (DMT), according to industry sources.