The Hindu Business Line : EU lifts embargo on Indian sweatshirts

INDIAN garment exporters whose cargo on quota Category 5 - - sweatshirt got stranded on the high seas when the European Union slammed an embargo on its entry - - got a reprieve.

The EU's Textile Committee has agreed to inter-category swings on other category products to let the Indian sweatshirts enter the EU under "exceptional flexibility".

Official sources told Business Line here that in response to a plea by the Indian Embassy in Brussels, the textile committee in a communication issued in Brussels on November 18 gave "a favourable opinion to the granting of the flexibilities for 3,500 tonnes." In its plea, New Delhi has suggested that in order to defuse the embargo situation arising out of the delay by the European Commission in releasing balance 3,500 tonnes of exceptional flexibilities, there could be normal inter-category swing from Category 7 (women's blouse) and Category 8 (men's shirt) products into Category 5 (sweatshirts).

While agreeing to this plea, the EU textile committee has made it clear that with this inter-category swing adjustment, "the exercise concerning the exceptional flexibilities for this year is closed." It further stated, "our member-States have insisted on the need for a very strict management of quotas" and also cited some cases of contravention of quota utilisation of products and sought remedial action so that quantities licensed and shipped remain within the agreed limits.

The EU put an embargo on the entry of sweatshirt consignment from India on November 13, which was the first shipment of additional quotas made available under exceptional flexibilities. The total quota utilisation during January to October 2003 amounted to 99.19 per cent with Categories 5,7,8 and 29 having registered a spurt when compared to the same period of last year, the sources added.

Meanwhile, Indian bed linen being exported to the 15-member EU is likely to face countervailing duties likely to be imposed from January 2004. The sources said that the European Commission in Brussels adopted a proposal to this effect on November 17, and it is understood to have proposed the imposition of definitive countervailing duties of 4.4 per cent to 10.4 per cent (the weighted average for co-operating companies not included in the sample being 7.6 per cent). The originally proposed duties were in the range of 4.4 per cent to 12.4 per cent, the sources added.

As Indian bed linen had been subject to repeated anti-dumping duty which got upturned by a WTO panel ruling, the EU, as a trade defence measure to stem import surge from India, resorted to clamping countervailing duty on imported bed linen from India, the sources said, adding that even on this Indian officials had effectively detected technical flaws under various permissible parameters of the WTO.

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