Reap on curbs on Chinese textiles

New Delhi, Feb 25 | Updated: Feb 26 2005, 05:57am hrs
India should take advantage of the restrictions on Chinas exports of textiles to the US and the EU till January 1, 2008 to gain serious market share in the region, the Economic Survey has suggested.

Options to secure greater market access for India as proposed in the Survey include sectoral tariff elimination initiative for textiles and clothing, negotiating reduction in MFN tariff in textiles of the countrys major trading partners in the on-going Doha Round at the World Trade Organisation (WTO) and exploring greater market access under preferential generalised system of preferences (GSP) in EU/US markets.

The Survey pointed out that China, which is poised to grab the major share in global trade, has a cap of 7-8% annual increase in exports of clothing to the US and EU until January 1 2008, by virtue of their being late signatory to WTO. India needs to concentrate on this window of opportunity which started in January 2005, when the quantitative restrictions (QRs) on exports got dismantled, and will go on for the next three years.

While tariffs are being brought down, contingency trade policy and non-tariff measures (NTMs) have become barriers to market access to exports from developing countries especially for products with lower value addition like textiles and leather, the survey observed.

About 35% of the total exports to the US in value terms faced NTMs in 2002, with their incidence in other developed countries being similar. A total of 105 anti-dumping cases and 40 subsidy cases have been initiated against India so far. Major initiators of these cases against India include the EU, the US, South Africa, Canada and Brazil.

India, which has been a leading user of anti-dumping instrument, has significantly reduced new investigations since 2003, with four new investigations initiated in the first half of 2004. The countries figuring in these investigations include China, Chinese Taipei, Indonesia and Thailand.

During 2004, India initiated 20 anti-dumping probe mostly against firms in China, Taipei and EU. Major product categories in these investigations include chemicals, petrochemicals, pharmaceuticals, fibre yarn and consumer goods.