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G. Srinivasan

Pakistan was eligible for export of clothing (Chapter 60 to 63) to EU at zero customs duty. The concessions would have major impact on India's exports to EU and might result in trade diversion in excess of 250 million euro.

NEW DELHI, March 12

AS the European Union (EU) Trade Commissioner, Mr Pascal Lamy, undertakes his two-day visit to India from Thursday, the issue of enhanced access to Indian textile goods to the 15-member European market is high on the agenda of the bilateral trade talks, besides issues relating to the World Trade Organisation (WTO). This will be the third visit of Mr Lamy to India in the last couple of years.

Official sources told Business Line here that India could not succeed with the EU for wresting commensurate concessions it had granted to Pakistan in October 2001 when it announced a bilateral trade package for Islamabad. This covered tariff removal and reduction and enhanced quotas for Pakistani textiles and clothing.

The sources said that New Delhi pointed out that the benefits granted by EU under the special GSP (Generalised System of Preferences) were unilateral.

It provided for suspension of customs duties by EU for all products, which have not graduated under special tariff arrangements to combat drug production and trafficking.

Pakistan was one of the beneficiary countries under this special dispensation. It was also eligible for export of clothing (Chapter 60 to 63) to EU at zero customs duty. This conferred a huge advantage to Pakistani exports to EU vis-à-vis India. The concessions granted to Pakistan would have major impact on India's exports to EU and might result in trade diversion in excess of 250 million euro.

Though India pursued the issue with the EU both in Brussels and in Geneva subsequently, it could not succeed even though it had outlined an alternate route to meet its concerns. The alternate proposals put forth by India included, among others, that

(i) EU would not initiate a review in the anti-dumping proceedings on bed-linen,

(ii) EU would decide not to initiate anti-dumping proceedings on items affected by zero duty concessions given to Pakistan and

(iii) EU would raise quota levels in denim, T-shirts, trousers, suitably and substantially so as to compensate for the trade loss of $225-250 million annually.

But as the issue remained unresolved, the Union Commerce Minister Mr Arun Jaitley, who will hold talks with Mr Lamy would attempt to craft a common point for a mutually acceptable solution, the sources stated.

These include, the sources noted, tariff-to-tariff reductions, discussion on non-tariff issues in return for suspension of quotas or grant of additional quotas in a few categories of interest to New Delhi.

India would also plead for an automatic process for use of exceptional flexibilities of quota as the existing machinery takes considerable time to process.

Finally, the sources said, as the integration schedules under the Agreement on Textiles and Clothing (ATC) with the EU have a greater concentration of low value added products, India should seek a favourable response to integrate high-value and fast-moving items in the integration process.

Exports to restricted countries increase

EXPORT of readymade garments to restricted countries during February touched a level of 132 million pieces valued at $486.80 million. This reflected an increase of 18.49 per cent in quantity terms and 33.04 per cent in value terms to the export performance of 111.4 million pieces and $365.90 million achieved in the same month last year.

According to an official release, exports of readymade garments in the first two months of the current calendar year stood at 292.4 million pieces valued at $1,086.8 million.

This reflected an increase of 25.01 per cent in quantity terms and 42.31 per cent in value terms, when compared to the same period last year.

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