'Rules of Origin' likely hurdle for textile exporters
28 Nov '05
2 min read
Even as the discriminatory quota regime has come to an end, Indian textiles continue to face non-tariff barriers in major markets including the EU, Turkey, South Africa and the US. The US 'Rules of Origin' is one of the major concerns for exporters as it is indirectly affecting them.
A textile ministry official stated that the changes introduced by the US in 'Rules of Origin' criteria does affect their exports to third countries like Sri Lanka and European countries.
He informed that the modification of the origin rules may also act as a trade defence measure.
He included that for example, in the case of made-ups, the US rules of origin states that the origin of the product is the country where the fabric is dyed and printed and undergoes two or more finishing operations, regardless of where it is finally converted into made-ups. While making a presentation at a seminar on 'Enhancing Competitiveness through Regional Co-operation in a Post-MFA Environment.
Textile ministry joint secretary Sudripta Roy stated that that Regional Trade Agreements (RTAs) and Preferential Trade Agreements (PTAs) are also acting as trade barriers. A study shows that the US foregoes tariff revenue of over $2.5bn every year on imports from RTA/PTA countries, amounting to indirect subsidy to the domestic industry.
Presently, exports of cotton bed-linen and polyester staple fibre to EU, polyester texturised filament yearn to Turkey and acrylic blankets to South Africa are subject to anti-dumping duties imposed by the importing countries.
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