Eu Ends Sops For Indian Textile, Engineering Exports

In a twin blow to local exporters, the European Union has given special preference for imports from Pakistan, which will allow duty-free access into 27 markets, while withdrawing the concessions for several Indian goods, including textiles and engineering. And, it's the Indian government, not EU, to be partly blamed, for creating this disadvantage for exporters.



While India had managed to block similar concessions nearly a decade ago after a challenge at the World Trade Organization, this time the sops have been given to deal with floods that hit Pakistan and have been given after the move was backed by New Delhi. The GSP-plus benefits will kick in from January 1.



The new concessions to Pakistan, known as GSP-plus or those above the Generalized System of Preferences, come at a time when the Indian textile sector was looking up, with exports and employment on the rise.



"Pakistan stands to gain on products on which it gets duty concessions and to that extent the competitivenss of Indian products gets eroded," said Abhijit Das, who heads the Centre for WTO Studies. While Apparel Export Promotion Council chairman A Sakthivel said garment exports will not be hit, Das identified products such as bed linen where Indian exports may be impacted.



The list of 75 goods on which Pakistan will enjoy duty concessions was not immediately available but exporters said textiles will be a major product. Although the concessions have been discussed for several weeks now, the European Parliament approved the package for Pakistan on Thursday, raising expectations of a $1 billion gain for India's neighbour.



From the same date, Indian exporters of several products ranging from chemicals, textiles, leather goods, motor vehicles, bicycles, aircraft parts and shipbuilding and components will lose 6-12% advantage



. "When it comes to bicycles, GSP benefit to China too has been withdrawn. So, we can compete there but life will be tougher for several other segments," said Anupam Shah, chairman of the Engineering Export Promotion Council.



Sources in the textiles industry said some Indian companies would look to invest in countries such as Bangladesh to claim concessions under schemes such as Everything Bur Arms (EBA).

Source : timesofindia.indiatimes.com