EU may discuss India’s textile bailout next week

S Venkitachalam

New Delhi, Jan 1: Brussels is expected to indicate early next week its response to a New Delhi request for bilateral talks to discuss a package for bailing out the textile industry on similar lines recently conceded to Islamabad. The package seeks a substantial increase in the export quotas and removal/reduction in import tariffs under the European Union’s GSP (Generalised System of Preferences) scheme.

New Delhi will, however, decide on opening up the textile sector further only if Brussels is prepared to agree on an increase in export quotas and removal of tariffs under EU’s GSP as a package, textiles ministry sources said. The textile sector has been passing through difficult times for more than a year now and the situation has been aggravated by the global slowdown and the September terror strikes on the US, forcing the ministry to scale down the already revised export target to $12 billion this fiscal.

The EU accounts for a little over 35 per cent of India’s total textile exports and hence there is a sense of urgency to push through the package that will bring the much-needed relief to the industry.

Sources conceded that Islamabad has been able to wrest concessions from Brussels in the form of a 15 per cent hike in the export quotas or all textile items from January 1, by lowering the import duties by 5 per cent each on yarn, fabrics and garments.