The Hindu Business Line : ‘Textile industry facing competition from neighbours’

Mumbai, Dec 18 Indian textile exporters are facing tough competition from Bangladeshi, Sri Lankan and Pakistani exporters who get benefits from European Union and US, allowing zero duty tariff levels, Mr P. Nayak, Director (Market Research) of the Textiles Committee, Ministry of Textiles, Government of India, told Business Line, at the sidelines of a FICCI conference.

“EU has granted the status of Generalised Systems of Preferences to Sri Lanka where they have to agree to 10 criteria and get zero duty tariff level while Bangladesh has got the Least Developed Country status from EU and availed itself of the facility. Pakistan, meanwhile, has got a zero duty tariff level from both EU and US, based on the arms protection where they help curb terrorism,” Mr Nayak said.

India does not qualify for any of the three and so is bearing the brunt. The Government is in negotiations with them to reduce the burden of tariff duties, he said.

The non-tariff barriers, such as anti-dumping and countervailing duties, quota restrictions, packaging, labelling, testing and quarantine requirements, were affecting Indian exporters, according to Mr Nayak.

At present, around 44 per cent of India’s exports to the US attracted a non-tariff barrier, he said. Besides, giving the example of GAP and Walmart, he said there were uncertainties, which needed to be ironed out with the EU.

Commenting on the appreciation of the rupee, Mr V.Y. Tamhane, Secretary General, Mill Owners’ Association, said, “It is not the rupee that is appreciating, it’s the dollar that’s depreciating.” The textile exports for 2007 stood at $21 billion and would touch $25 billion, falling short of the target of $35 billion, said Mr Nayak.

This was further discouraging the textile exporters, who were already grappling with competition from China, Korea and Vietnam, besides its neighbours, he added.