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Journalism of Courage
Brussels is not happy. It’s offer of 30 per cent more quotas for Indian textile makers has fallen flat, as New Delhi finds the ‘‘bindings’’ a political no-no.
‘‘Not in these 2-3 months,’’ a senior Indian bureaucrat said on Tuesday. ‘‘The (EU) offer involves a substantive policy decision. It can be considered only after the elections. It would have been too much to expect us to agree to bring bound rates (of 40 per cent) to specific rates.’’
Industrialists like O.P. Lohia of Indo-Rama and S.K. Birla of VXL said that they needed more time to understand the stakes on both sides.
Brussels believes that people like Lohia and Birla are missing out on 500 million Euros (Rs 2,000 crore). Quotas are going anyway, if only New Delhi binds its tariffs to 20 per cent, revises specific duties so that they don’t exceed the ad valorem equivalent applied to average EU export prices in the region and ends fears on non-tariff barriers in the future.
The textile industry is one of the most protected sectors in the EU and the US. In the EU, tariffs on garments are 10.5 per cent, for other textile items it ranges between 6 and 7 per cent. Tariffs imposed by the US on garments range between 18 and 32 per cent. In India, tariffs on yarn are 20 per cent, while on other textile products they range from 25-40 per cent.
