The Hindu Business Line : WTO issues: No consensus among textile bodies

WILL the absence of consensus between various textile industrial associations on crucial issues such as fiscal policies and tax anomalies prove spoil-sport on India's handling the World Trade Organisation (WTO) related disputes?

The lack of cohesion between the domestic textile trade bodies would make the Union Government's tasks in tackling anti-subsidy investigations by the Western trade blocks like the European Union difficult?

It appears so as the continued differences among the diverse textile manufacturers/trade bodies representing different sectoral interests have prevented them in formulating a common ground at macro-level on issues such as fiscal duty/subsidies, according to Mr Atul Chaturvedi, Joint Secretary, Ministry of Textiles, Government of India.

"Our experience has been that each exemption (of fiscal duty or relaxation) will represent one textile association. In the absence of consensus between the textile bodies, it has led us to believe whether the industry wants the Government to act as an arbitrator in resolving the differences. More we try to distance the industry from the Government as part of reformation, more textile bodies rush to the Government," Mr Chaturvedi said.

He made these observations while inaugurating here the textile industrial exhibition organised by the Southern India Mills Association (SIMA).

Citing the recent anti-subsidy investigations against the country's export of bedlinen and polyester textiles launched by the European Union, Mr Chaturvedi said the export promotional elements such as the EPCG, sales tax emission or DEPB components would figure while tackling these issues. The issue is that any trade association seeking to defend such anti-subsidy cases should establish its `eligibility' to defend the industry because these representative bodies should account for at least 25 per cent of the production capacity of the particular product manufacture in that country.

This being the case, it would be more difficult in identifying such a body, which would also have all the adequate data needed to defend its members in the international trade disputes. "So, there is a compulsion for the domestic textile industrial associations to sink differences and present a common ground," Mr Chaturvedi said.

On the part of the Government, he said the policy approach has been that there should not be any distortion in the fiscal duty structure between the domestic sectors so as to render the entire textile chain globally competitive, and in case of any support required to any particular sector, it should be given outside the duty structure.