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WTO ruling on bed linen to hit Indian exports

BS Economy Bureau in New Delhi

India's bed linen exports are expected to take a major hit because of the World Trade Organisation compliance panel's ruling on the bed linen case.

The panel has ruled in favour of the European Union in the dispute on reimposition of anti-dumping duty on Indian cotton bed linen.

India had taken the stand that the European Union had not fully implemented the rulings of the Dispute Settlement Body in the cotton bed linen case.

The panel has turned down all requests made by India and has expressed the view that suspension of duty is equivalent to full compliance.

The Indian side had argued that the European Union had not withdrawn or scrapped the duty, which was 'inconsistent' with WTO rules.

The panel had also upheld the partial interim review initiated by the European Union, said industry sources.

The partial interim review is expected to recommend imposition of higher duties on imports of cotton bed linen from India to the European Union.

While the European Union had initially imposed definitive anti-dumping duty ranging from 2.6 per cent to 17 per cent on these imports from India, December 5, 1997 onwards, the partial interim review is likely to suggest imposition of duties of up to 26 per cent.

"This will have a big impact on our exports and could virtually wipe out Indian exporters from the market," say industry sources.

The government now has the option of going to the Appellate Committee on the issue. However, the final stand will be taken after seeking opinions from the ministry of commerce and the Textiles Export Promotion Council (Texprocil). Texprocil will hold a meeting in Mumbai tomorrow to discuss the issue.

In the ministry, officials are of the view that options would have to be weighed carefully.

"On one hand, we have nothing to lose by taking the issue further. On the other, if we lose the case even in the Appellate Committee, the European Union can harden its stance. In such cases, the diplomatic route is sometimes effective, however, if the European Union decides to take a strong stand, even this route will become ineffective," sources said.

All concerned parties will therefore need to be consulted and pros and cons weighed before a decision is taken, said officials.

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