EC Initiates Anti-subsidy Measures On Bed linen

Mumbai, December 21: | Updated: Dec 23 2002, 05:30am hrs
Even as the the five-year period of anti-dumping duties on bed linen slapped by the European Commission (EC) in 1997 on Indian exports is about to end, the EC authorities have decided to initiate anti-subsidy on the same product. The ECs move comes at a time when the EC authorities have already initiated the expiry review of the anti-dumping measures on import of cotton type bed linen from India into the EU.

While the anti-dumping expiry review efforts were communicated by EC on December 4, the move to initiate anti-subsidy was communicated on December 18 through a notification to The Cotton Textiles Export Promotion Council (Texprocil), the apex body monitoring cotton-based product exports.

All cotton bed linen exporters from India are expected to furnish requisite details to the EC authorities by December 31, 2003.

Following this new levy by EC, around Rs 500 crore worth of annual export of bed linen is feared to be hampered. Given the controversial levies, the total quota utilisation of bed linen exports to EU has already declined sharply to around 59.75 per cent in 2002 from over 103.94 per cent in 1997. This is despite the fact that the overall quota level has increased to 23,688 tonne in 2002 from 16,394 tonne in 1997.

While Texprocil executive director Siddhartha Rajagopal refused to comment on the latest development, industry sources said, this is nothing but harassment to exporters of Indian cotton-based products in general and bed linen in particular.

There is a very little component of imported products in bed linen exported to the EU, said an industry source. Therefore, it is surprising why the EC authorities target again and again the same product for anti-dumping and anti-subsidy measures that too for negligible component of imported products on value added items exported to the EU, it added.

The quantum of duty-drawbacks and other export promoting benefits these exporters would be benefiting is insignificant for the EC authorities to consider as subsidies given by the government. Usually, the exporters are entitled to get import duty paid on products used in products for exports as drawback through the DEPB scheme. Along with other similar schemes aimed at boosting exports, these schemes are considered by the EC authorities as subsidies given to the exporters, and therefore, the move to slap anti-subsidy on bed linen exports which is in addition to anti-dumping already levied by the EC.

In both cases, the EC authorities are expected to apply a sampling method in accordance with Article 17 and Article 27 of their basic regulations.

Terming the ECs move as harassment a leading exporter said, Indias share in EUs import of bed linen is very small, compared to our competitors like Egypt and Indias exports would not be a cause for injury to EUs bed linen manufacturing industry.

Meanwhile, the local cotton bed linen exporters have urged the government to take all necessary steps under the WTO rules, including procedures governing the settlement of disputes to ensure that the decision of the appellate body is implemented in its true letter and spirit.