EU Ends Duty Concession on Indian Textile, Engineering Exports | SupportBiz


EU Ends Duty Concession on Indian Textile, Engineering Exports

Tags: GSP-plus, EBA, AEPC, WTO
Allows duty-free access for Pakistani imports into 27 markets.

New Delhi, December 18: The European Union has withdrawn tax sops on several Indian goods including textiles and engineering, and has bestowed Pakistan with similar concessions, to help the country deal with severe floods, reports TNN.

The benefits, called the Generalized System of Preferences or GSP-plus, will be applicable on Pakistan from January 1, 2014. From the same date, several Indian products ranging from chemicals, textiles, leather goods, motor vehicles, bicycles, aircraft parts and shipbuilding and components will lose 6-12 per cent advantage.

India had received similar concession nearly a decade ago after a challenge at the World Trade Organization. The withdrawal of the sops will hit the textiles industry more since both exports and employment are increasing in the sector. However, Apparel Export Promotion Council chairman A Sakthivel denied that the move will damage the garments sector in any way. Sources in the textiles industry said some Indian companies would look to invest in countries such as Bangladesh to avail concessions under schemes such as Everything Bur Arms (EBA).

Abhijit Das, head of the Centre for WTO Studies said, "Pakistan stands to gain on products on which it gets duty concessions and to that extent the competitiveness of Indian products gets eroded." He further said that, exports of products like bed linen may be impacted.

As per Anupam Shah, chairman of the Engineering Export Promotion Council, bicycles exports will see fair competition since other major exporter in the category China does not enjoy GSP. “But life will be tougher for several other segments,” he added.