Non-quota barriers may dull India edge

The quota-free regime from January `05 may not benefit Indian cotton textiles export to a great extent if the developed countries continue to impose non-quota barriers.

Anti-subsidy investigations with anti-dumping actions are on the rise. The EC has also initiated an anti-subsidy action on cotton bed linen while continuing to pursue anti-dumping complaints on this item, said Texprocil chairman Lalit Desai.

The trends in investigations are sending disturbing signals. There is a widespread belief amongs exporters that the EC and USA are targeting various export promotion schemes across the production chain in countries like India as prohibited subsidies, so as to impose new forms of restraints on imports of textile products after the removal of quotas in 2005, he said.

While initiating anti-subsidy action against countries like India, the
developed countries should remember that they themselves are providing direct subsidies to a variety of products as pointed out at the recent WTO ministerial conference at Cancun, he said. For instance, the US government is providing subsidies to cotton producers amounting to over $3 billion annually, almost equal to India’s cotton textile exports, he said.

Mr Desai said the time has come for re-positioning the industry by
giving greater thrust to a policy aimed at promoting ‘manufactured’
exports in order to stave off external competition. This can be achieved by inviting global giants to set up manufacturing base in India for outsourcing their products. This model, he pointed out, has been tried out very successfully in the information technology sector.