The Hindu Business Line : Textile industry fears dumping from China

THE move by the US and the European Union to impose import curbs on Chinese garments has sparked off apprehensions among Indian textile sector players about the possibility of Chinese clothing items swamping the Indian market, for domestic consumption and third-country transhipment.

Several batches of Chinese textile production, which had been readied for shipment against orders from the US buyers prior to the ban, are likely to find no takers, at least in the short run.

"There are apprehensions that these items could be dumped in large markets such as India and the Asean nations at throwaway prices," an industry representative said.

In fact, countries such as Indonesia have come out in the open about their apprehensions.

This week, the Indonesian trade minister warned of a surge in Chinese textile and apparel products into the domestic market following US restrictions.

Already, a significant amount of Chinese garments is believed to be routed into India through Nepal, which emerged as the biggest exporter of ready-made garments to India during much of 2004-05, accounting for nearly 15-18 per cent of shipments, despite having practically no textile industry of its own, industry players said.

Nepal gets preferential access to the Indian market.

"Following the clampdown announced by the US and the EU, there is a fear that Chinese textile products could be dumped into India.

"The shipments could be routed through Nepal, which has been the traditional route, or could be exported directly to India," a domestic industry representative said.

According to a trade expert, all countries close to the Chinese borders are likely to see some degree of dumping of Chinese products.

"In the case of India, since the Nepal route already exists, it is only a matter of time before Chinese products are re-routed into the country," a textile exporter said.

"India is the biggest textile market near China and is the fastest growing market in the world. Even though the value realisation is much lower compared to the Western markets, India offers a ready market in the short run for Chinese goods," an industry expert said.

The Bush administration had, last week, imposed `safeguard quotas' on three categories of Chinese garment imports, in response to complaints from domestic producers.

The EU has also launched a 60-day investigation into surging Chinese textile imports during late April - a move that could also result in import quotas on certain types of garments.

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