DEPB Scheme May Be Replaced With WTO Compatible Mechanism

New Delhi, Nov 3: | Updated: Nov 4 2003, 05:30am hrs
The government is considering replacement of the duty entitlement passbook (DEPB) scheme with a new mechanism, under pressure from the World Trade Organisation (WTO).

We have to re-shape this (DEPB) scheme so that it remains WTO compatible, joint secretary in the ministry of textiles KK Jalan said at India Textile Summit 2003, organised by the Confederation of Indian Industry (CII). The scheme, a refund of the additional duty paid by exporters, is being treated as subsidy by various WTO members, he said.

He also cautioned the industry about the European Unions (EU) proposed move to include rule of origin clause in textile imports which will adversely affect Indian exports. The new rules which are being patterned on the US model will make it compulsory for the exporters to mention as to where the product was manufactured, he said.

With the new rules, a manufacturer in EU can source fabric from outside and put the made-in-EU label even with a minor value addition, he said.

Earlier speaking at the event, textile minister Shahnawaz Hussian assured the industry of a favourable Budget for the sector to equip it for post-multi fibre agreement (MFA). In his presentation on global textile and apparel sourcing, economic intelligence unit textile intelligence editorial director Robin Anson, said that it was important for India to open its market to become more competitive.