India’s move may also serve as a warning for countries like Bangladesh, Peru and Brazil, which are planning curbs against Indian textile imports. With the global downturn reducing the demand for most goods, countries are resorting to various protectionist measures to check imports.
The additional duties imposed by Turkey had increased the total import duties to more than 15% against a bound rate, or ceiling rate, of 5% at the WTO, said Siddhartha Rajagopal, executive director of Texprocil, a non-profit international marketing organisation for local manufacturers of cotton yarns, fabrics and garments.
Likewise, Egypt has hiked the import duty on cotton textile from India to 30% against the 15% bound rate at WTO. “According to our computation, Turkey alone owes us $2 billion in compensation for the loss suffered by the industry due to the increase,” Mr Rajagopal said. Turkey is India’s second-largest market for cotton textiles after Bangladesh, accounting for annual exports worth $186 million while Egypt ranks fifth with exports worth $100 million.
According to the government official, who didn’t want to be named, action can be taken against the two countries if the discussions prove that the higher duties were imposed just to reduce competition from the domestic industry without suitable provocation. However, if the two countries can prove that it was a measure against a surge in imports taken to protect the domestic industry from injury, it will be valid at WTO as it allows such safeguard measures.
“If it is proved that this is a safeguard action taken by the two countries, there is little that India can do about it as this is permissible under WTO rules,” Confederation of Indian Textile Industry (CITI) secretary general DK Nair said. “If India is able to take action against Turkey and Egypt for the duty hike, it would act as a disincentive to other countries to make a similar move. Otherwise, many of our importing countries would start increasing import duties beyond bound levels,” Mr Rajagopal said.
“If it is proved that this is a safeguard action taken by the two countries, there is little that India can do about it as this is permissible under WTO rules,” Confederation of Indian Textile Industry (CITI) secretary general DK Nair said. “If India is able to take action against Turkey and Egypt for the duty hike, it would act as a disincentive to other countries to make a similar move. Otherwise, many of our importing countries would start increasing import duties beyond bound levels,” Mr Rajagopal said.
Date:3/6/2009
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