India probing Turkey’s additional duties on textiles

New Delhi is examining in detail the additional customs duties imposed by Turkey on a range of textiles and garments items from countries including India to see if they violated World Trade Organisation (WTO) norms.

The increased duties were imposed in 2011 following a safeguard investigation, but there are reasons to believe that Turkey might not have followed the prescribed criteria for imposition of safeguard duties as they are not applicable on all countries, a government official told BusinessLine.

“For Indian exporters, the imposition of the additional duties resulted in a sharp increase in levies for textiles and garments from 8 per cent and 12 per cent to 28 per cent and 42 per cent respectively. This has been a big disincentive for Indian exporters to expand in the Turkish market. Since there is no move yet to discontinue the duties, we have to find out if these are valid under WTO,” the official said.

India’s garments exports to Turkey declined from $650 million in 2011-12 to $340 million in 2016-17 while textiles exports increased marginally from $330 million to $430 million in the same period.

Officials believe that Turkey’s attempt to pass off the additional customs duty as a safeguard duty (allowed under the WTO framework) may not work as it was not uniformly applied on all countries.

“The additional duties are not imposed on EU members or Turkey’s free trade agreement partners. Hence they may be discriminatory,” official said.

Moreover, safeguard duties are imposed when it is conclusively proved by the imposing country that increased imports were hurting the domestic industry. “Turkey, to the best of our knowledge, has not submitted proofs of increase in imports and its impact on domestic companies. We have to examine this as well,” the official said.

A decision on the next mode of action for India would be taken after the Commerce Ministry concludes its investigation and comes to a conclusion.

“If it is concluded that Turkey is flouting WTO norms, then we may want to hold a bilateral consultation before flagging the issue at the WTO. We have been able to settle disputes through consultation in the past as well,” the official said.