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The textile products continue to hold

an important role in total export

basket of the country. The data

about export targets for 2002-03 and the

latest status of exports are given in the

Table below.

CHAPTER X

TEXTILE EXPORT

EXPORTS OF TEXTILES

Exports of textiles have shown an increaseat a compound annual rate of growth(CARG) of 14.01% in rupee terms and7.77% in dollar terms during 1992-93 to2001-2002. The textile exports during theyear 2001-02 have amounted to US$ 10715million as against the exports of US$12037.6 million during the previous year,making a decline of around 11.0%.

However, the downtrend in textile exports

has been reversed and the textile exportshave again started recording positive growthfrom the year 2002-03. As per DGCI&Sdata, textile exports during the period ofApril-November 2002 amounted to US$7859.9 million as against US$ 7137.4 millionduring these months in the previous year,recording an increase of around 10.10%.

TARGETS AND ACHIEVEMENTS

On the basis of recent initiativestaken by Ministry to resolve exporter’s

Sector T arget Apr .-Nov. 01 Apr.-Nov. 02 % increase/ % target2002-03 decrease of 2002 achieved

03 over 2001-02 (US$)

Rs. US$ Rs. US$ Rs. US$ReadymadeGarment 6000 13915.3 2940.1 16073.1 3303.0 15.5% 12.3% 55.1%

Cotton Textiles 4250 9930.7 2098.2 10761.9 2211.6 8.4% 5.4% 52.0%

Man-made textiles 1500 3441.0 727.0 4355.9 895.1 26.6% 23.1% 59.7%

Silk 450 1339.1 282.9 1408.5 289.4 5.2% 2.3% 64.3%

Wool & Woollen 350 1053.4 222.6 943.5 193.9 -10.4% -12.9% 55.4%

Total 12550 29679.5 6270.8 33542.8 6893.0 13.0% 9.9% 54.9%

Handicrafts 2170 3488.2 737.0 3862.73 793.8 10.7% 7.7% 36.6%

Jute 200 396.8 83.8 589.31 121.1 48.5% 44.5% 60.6%

Coir 85 216.9 45.8 253.01 52.0 16.7% 13.5% 61.2%

Total 15005 33781.4 7137.4 38247.9 7859.9 13.2% 10.1% 52.4%

Source : Foreign Trade Statistics of India (Principal Commodities & Countries), DGCIS, Kolkata

(Value: US $ in Million/Rs. in Crores)

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problems and also in anticipation of revivalof demand in the coming months, textileexports are expected to be in the range ofUS$ 13 billion. However, Ministry of Textileshas set a new challenging export target ofUS$ 15 billion for the year 2002-03. Againstthe target, the exports of US$ 7859.9 millionduring the period April-November 2002indicate an achievement of target by 52.4%.

SECTOR-WISE ANALYSIS

(i) Readymade Garments:

Readymade garments account forapproximately 46% of the country’s totaltextile exports. They represent value addedand less import intensive sub sector, thusdeserving a special place. Readymadegarments had recorded an annual exportgrowth of 9.2% in 1999-2000 and 16.9% in2000-2001 in dollar terms. However,readymade garment exports recorded adecline of 10.4% in 2001-02, as comparedto the previous year. During the period April-November 2002, Readymade Garmentexports were US$ 3303.0 million, recordinga growth of 12.3% as compared to thecorresponding period of 2001-02. The majorimporting countries/regions of ourreadymade garments are the E.U., theU.S.A., Canada, Japan, U.A.E. andSwitzerland.

(ii) Cotton Textiles includinghandlooms:

Cotton textiles i.e. yarn, fabrics and made-ups (Millmade / Powerloom/ Handloom)constitute more than 2/3rd of our exports ofall fibres/yarns/made-ups. There had beena slow down in exports of cotton textiles inrecent years, which is attributed to fall in

cotton yarn exports due to general recessionin major markets and the frequent use ofanti-dumping action by European Union onour cotton textile products. This sector hadexhibited a healthy growth of 10.2% duringthe year 1999-2000 and 14.2% in 2000-01in dollar terms. However, cotton textileexports recorded a decline of 13.4% in2001-02 as compared to the previous year.During the period April-November 2002,cotton textiles exports have amounted toUS$ 2211.6 million recording a growth of5.4% as compared to the correspondingperiod of 2001-02.

(iii) Man-made Textiles:

The exports of man-made fibre textilesshowed an increase of 18.8% in 1999-2000and 28.1% in 2000-2001 over the sameperiod of previous year in dollar terms.However, man-made fibre textiles exportshave marginally declined by 1.1% in 2001-02 as compared to the previous year.During the period April-November, 2002,man-made textiles have amounted to US$895.1 million recording a growth of 23.1%as compared to the corresponding period of2001-02.

(iv) Silk T extiles:

During the year 1999-2000 and 2000-01, silkexports had shown an increase of 37.7%and 30.0% respectively in dollar terms.However, silk textiles exports have declinedby 10.8% in 2001-02 as compared to theprevious year. During the period April-November 2002, Silk exports haveamounted to US$ 289.4 million recording agrowth of 2.3% as compared to thecorresponding period of 2001-02.

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(v) Woollen Textiles:

Exports of woollen textiles had beenshowing declining trend, which has beenattributed to sluggish market conditions,over-stocking in major markets, South EastAsian currency crisis etc. Exports ofwoollen textiles declined by 33.0% in dollarterms in 1999-2000 as compared toprevious year. However, the woollen textileexports have shown an increase of 27.6%in 2000-2001 over the corresponding periodof last year. However, woollen textileexports declined by 16.7% in 2001-02 in USdollar terms as compared to the previousyear. During the period April-November,2002, wool exports have declined by 12.9%as compared to the corresponding period of2001-02.

(vi) Handicrafts including Carpets:

Handicrafts is one of the sub-sectors whichcontributes substantially to the overall textileexports. In dollar terms, the sector exhibitedan annual export growth of 11.7% in 1999-2000. However, in the fiscal year 2000-01,the handicrafts export recorded a decline of4.9%. However, handicraft exports havedeclined by 15.4% in 2001-02 as comparedto the previous year. During the periodApril-November 2002, handicrafts includingcarpets exports have exhibited a growth of7.7% in dollar terms, as compared to thecorresponding period of 2001-02.

(vii) Coir:

The Coir exports had recorded a growth of4.6% in 2000-01 in dollar terms. However,the coir exports showed a negative growthof 38.7% in 1999-2000. However, Coirexports have increased by 27.5% in 2001-

02 as compared to the previous year.During the period April-November, 2002,Coir exports have amounted to US$ 52.0million recording a growth of 13.5% ascompared to the corresponding period of2001-02.

(viii) Jute:

The Jute sector had recorded a negativegrowth of 9.1% in 1999-2000. However, Juteexports had exhibited a healthy growth of62.1% in 2000-01 in dollar terms. However,Jute exports have declined by 18.7% in2001-02 as compared to the previous year.During the period April-November, 2002,Jute exports have amounted to US$ 121.1million recording a growth of 44.5% ascompared to the corresponding period of2001-02.

ADMINISTRATION OF EXPORTENTITLEMENTS (QUOTAS)

The international trade in textiles and clothingwas regulated by special arrangements for40 years outside the rules of GeneralAgreement on Tariff and Trade (GATT). Theframework of Multi-Fibre Arrangement (MFA)applied to international trade in textiles andclothing for the period 1974 to 1994. India hasentered into bilateral agreements with USA,Canada, EU etc., exports to which accountfor a major share of total exports of Indiantextiles. Consequent upon the establishmentof the World Trade Organisation (WTO) witheffect from 1.1.1995, the quantitativerestrictions in the bilateral agreements underthe MFA are being governed by theAgreement on Textiles and Clothing (ATC)contained in the final Act of the UruguayRound negotiations. The quota regime in thetextile sectors is scheduled to be completely

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phased out by the end of 2004 AD.

The Ministry of Textiles is operatingGarments and Knitwear Export Entitlement(Quota) Policy 2000-2004 and Yarn, Fabricsand Made-ups Export Entitlement (Quota)

Policy 2000-2004 for distribution of quotasimposed by USA, EU and Canada. Thebreak up of quota allocation under varioussystems for export of yarn, readymadegarments and other textiles is given in thetable below.

PERCENTAGE OF ANNUAL LEVEL DISTRIBUTION(as on 31-10-2000)

System Y arn and Fabric {other Made- Made-up Ready-Fabrics than Cat. ups Handlooms made{Cat. 3,3a/ 3,3a/EU, 31a, MM/PL GarmentsEU,31a,32a 32a/Canada}/ Canada}

Past PerformanceEntitlement (PPE) 55 55 55 55 70

ManufacturerExporters’ Entitlement(MEE) 15 15 15 - -

Ready GoodsEntitlement (RGE) 30 15 15 45 -

Non-QuotaEntitlement (NQE) - - - - 5

Powerloom Exporters’Entitlement (PEE) - 15 15 - -

New Investors’Entitlement (NIE) - - - - 15

First-Come-FirstServed (FCFS) - - - - 10

As indicated in the table, the available quotasare distributed under different systems ofallocations such as Past PerformanceEntitlement (PPE), First Come First ServedEntitlement (FCFS), ManufacturersExporters’ Entitlement (MEE), Non-QuotaEntitlement (NQE), Powerloom Exporters’Entitlement (PEE), New Investors’Entitlement (NIE) etc. Export Entitlement(Quota) Policy in respect of garments and

knitwear is implemented by Apparel ExportPromotion Council (AEPC) and Wool &Woollen Export Promotion Council, whereasin the implementation of Export Entitlement(Quota) Policy in respect of Yarn, Fabricsand Made-ups, two Export PromotionCouncils namely Cotton Textiles ExportPromotion Council and Synthetic & RayonExport Promotion Council are involved.

During the year 2002-03, certain decisions

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to further streamline of quota administrationwere undertaken, which are listed asfollows: -

i) A Notification dated 06-03-2002 hasbeen issued regarding relaxation inperformance level for purpose offorfeiture of EMD/BG/LUT/Post DatedCheque for the year 2001.

ii) A Notification dated 28th May 2002 hasbeen issued regarding changing thelast dates of realisation of exportsfrom 31st August to 31st December insub-para 5(iii) and 7(iv) of theGarment & Knitwear ExportEntitlement (Quota) Policies 2002-2004.

iii) A Notification dated 9th July 2002 hasbeen issued allowing NQE on exportsmade to Russia against freelyconvertible currency.

A few other minor amendments such asextension in FCFS validity period, reductionin Earnest Money Deposit (EMD) amountsetc were also made to reduce thetransaction cost of exporters.

EXPORT PROMOTION MEASURES

In order to encourage upgradation of TextilesSector and to give a fillip to exports of textileproducts, some of the important initiativestaken are as follows:

(i) Announcement of New TextilePolicy: - One of the main objectives of theNew Textile Policy (NTxP-2000) announcedin November 2000 is to facilitate the textileindustry to attain and sustain a pre-eminentglobal standing in the manufacture andexport of clothing. The policy endeavours toachieve the target of textile and apparel

exports from the present level to US $ 50billion by 2010 of which the share ofgarments will be US $ 25 billion. Subsequentto the announcement of NTxP-2000, wovensegment of readymade garment sector hasbeen de-reserved from SSI and theannouncement has been made for de-reservation of knitwear from SSI.

(ii) Announcement of TextilePackage: - Some of the importantannouncements made in the Union Budget2002-03 in respect of textile sector are asfollow: -

i) Dereservation of knitwear sector fromSSI announced.

ii) Withdrawal of CENVAT exemption onplain / cross reel hank yarn of cottonas well as artificial staple fibre andlevy of CENVAT of 8% except cottonyarn in plain (straight) reel hanks ofupto 2 counts manufactured fromcotton waste on condenser cardmachines.

iii) Introduction of optional CENVAT @12% (BED 8% + AED 4%) on greyfabrics

iv) CENVAT reduced on woven and man-made knitted processed fabrics –from 16% (Basic 8% + AED 8%) to12% (Basic 8% + AED 4%).

v) Compounded levy system forindependent power processingabolished.

vi) An optional CENVAT of 12% (CENVAT8% + AED 4%) prescribed forprocessed knitted fabrics of cotton.

vii) An optional levy of 12% ad-valoremintroduced in the budget in the

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knitwear sector.

viii) CENVAT reduced from 16% to 12%on woven garments and made-ups.Woven garments made fromhandloom fabrics exempted fromCENVAT.

ix) On specified 16 items of silkmachinery (weaving, processing andtwisting) import duty reduced from25% to 10%. The import of suchmachinery also exempted from CVD.Specified capital goods items of silkweaving, processing and twistingmachinery also exempted fromCENVAT.

x) Shuttle automatic looms exemptedfrom CENVAT.

xi) Certain specified capital goods of juteindustries exempted from CENVAT.

xii) 28 specified items of textile machineryexempted from CENVAT as alsoimport of such items from CVD.

xiii) On new plant and machineryacquired after 1st April, 2002admissibility of additional depreciationat the rate of 15% made applicable.

The Schemes applicable last year, such asfollows, continued during the year forpromotion of exports.

(i) Technology Up-gradation FundScheme :- In view of the urgent need forstepping up the process of modernisationand technology Upgradation of the textileindustry in India, Ministry of Textiles launcheda Technology Upgradation Fund Scheme(TUFS) for the textile and jute industry for afive years time frame w.e.f. 01.04.1999 to31.3.2004, providing for 5% interest

reimbursement in respect of loans availedthereunder from the concerned financialinstitutions for investments in benchmarkedtechnology for the sectors of the Indiantextile industries specified thereunder. Anamount of Rs. 6100.82 crore involving 1782applications has been sanctioned upto 31st

December, 2002. Out of which, an amountof Rs. 4202.60 crore stands disbursed to1430 applicants.

(ii) Accelerated Depreciation:-Weaving, processing and garmentmachinery, which is covered under TUFS,has been granted the facility of accelerateddepreciation at the rate of 50%.

(iii) Liberalization of FDI Policy:Government has allowed foreign equityparticipation upto 100%, through automaticroute, in the textile sector with the onlyexception in knitwear/knitting sector whichis still reserved for SSI.

(iv) Export Promotion Capital Goods(EPCG) Scheme: The facility to importcapital goods under Export PromotionCapital Goods (EPCG) Scheme at 5%concessional rate of duty continued.

(v) Advance Licensing Scheme: Witha view to facilitating exports and to accessduty-free inputs under the scheme,standard input-output norms for about 300textiles and clothing export products havebeen prescribed and this scheme remainedunder operation. 10% variation in Gram perSq. Mtr. has been allowed for fabricsimported under duty free Advance LicensingScheme. Additional items such as zipfastners, inlay cards, eyelets, rivets, eyes,toggles, velcro tape, cord and cord stopperincluded in input output norms for garment

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exports under Advance Licensing Scheme.

(vi) Duty Exemption Pass Book(DEPB) Scheme: DEPB credit rates havebeen prescribed for 79 textiles and clothingproducts (The DEPB credit rates coverabout 150 textile and clothing products, forwhich Standard Input Output Norms (SION)are prescribed). The nomenclature andrates for DEPB entries pertaining to certaintextile products rationalized. Ministry ofTextiles made a strong case for admissibilityof DEPB rates for jute products andconsequently DGFT announced DEPBrates for hessian cloth, hessian made-ups,sacking cloth, sacking made-ups, jute millsaver, jute yarn and jute twine. At theinstance of Ministry of Textiles, DGFT hasissued orders extending DEPB rates forblended textile items.

(vii) Benefits of Exim Policy forcenters of economic excellence: With aview to encouraging further development ofcenters of economic and export excellence,textile centres such as Tirupur for hosiery,woolen blankets in Panipat, woolen knitwearin Ludhiana are inter-alia to be allowed EximPolicy benefits like EPCG for commonservice provider, accessing of funds byrecognized associations under the MarketAccess Initiative Scheme and Entitlementfor Export House status at Rs. 5 croresinstead of Rs. 15 crores.

(viii) Duty Drawback Scheme:- Theexporters are allowed refund of the exciseand import duty suffered on raw materialsetc. under the scheme so as to make theproducts more competitive in theinternational market. Department ofRevenue have revised All Industry Rate of

Duty Drawback w.e.f. 1.6.2002. While insome textile items, there have been upwardrevision in duty drawback rates as well asin value caps, the duty drawback rates andvalue caps in case of handicrafts andapparel items were reduced. Based on thefeedback received from the trade and afterstudying the impact of such revision ontextile exports, Ministry of Textiles took upthe matter with Department of Revenue forincrease in duty drawback rates in the caseof handicraft and apparel items.

(ix) Removal of restriction on import/export of cotton and cotton waste: TheGovernment also removed restrictions likeregistration of imports or quota on exportsin respect of raw cotton and cotton waste.

(x) Human Resource Development:Attention has also been paid to HumanResource Development in the textile sector.Towards this end, particular mentiondeserves to be made of National Institute ofFashion Technology (NIFT) which isimparting training to Fashion Designing andFashion Technologists to cater to thehuman resource requirements of garmentindustry. The NIFT has 6 branches atMumbai, Calcutta, Hyderabad, Bangalore,Chennai and Gandhinagar.

Ministry of Textiles is also concerned overthe need to improve the quality of textiletraining institute in the country. Therefore,a Nodal Centre for Upgradation of TextileEducation has been established at the IndianInstitute of Technology, Delhi with fundingfrom the Ministry of Textiles.

The Apparel Export Promotion Council hasbeen running Apparel Training and DesignCentre at important apparel centres located

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at Chennai, Delhi, Kolkata, Hyderabad,Jaipur and Bangalore in order to traincraftsmen at shop floor level to meet thegrowing needs of Apparel Industries.

(xi) Construction of ApparelInternational Mart:- Apparel ExportPromotion Council is constructing an ApparelInternational Mart (AIM) at Gurgaon withassistance from the Government. The AIMwould consist of 250 show rooms and wouldhouse exhibition complex, business rooms,conference rooms etc., spread over 3.14 lacsq. ft. constructed area comprising of 7 floors.The construction of the building is expectedto be completed towards the end of 2003 withan estimated project cost of Rs.51.52 crores(excluding the cost of the land). AIM Complexwould have a permanent display centre aswell as 250-300 showrooms which will beallotted to the exporters as per set criteria.This will provide a world class facility to theapparel exporters to showcase their productsand will serve as one stop shop for reputedinternational buyers. The Government hadreleased a sum of Rs. 12.10 crores forpurchase of land from HUDA. A grant of Rs.15 crore has already been released towardsthe cost of construction of AIM project. Inorder to ensure the timely completion of theproject, the budgetary allocation of Rs. 12crore in B.E. 2002-03 has been enhanced toRs. 17 crore.

(xii) Setting up of modernlaboratories:

The Ministry of Textiles has assisted theTextile Committee in setting up of moderntextile laboratories to ensure that the textilesexported from the country meet allinternational environmental standards.

(xiii) Apparel Park for Exports Scheme :

A centrally sponsored scheme titled“Apparel Parks for Exports Scheme” hasbeen launched. The scheme is intended toimpart focussed thrust to setting up ofapparel manufacturing units of internationalstandards at potential growth centres and togive fillip to exports. Since the inception ofscheme in March 2002, nine ProjectProposals have been sanctioned for settingup Apparel Parks at Tronica City & Kanpur(U.P.), Surat (Gujarat), Thiruvananthapuram(Kerala), Visakhapatnam (Andhra Pradesh),Ludhiana (Punjab), Bangalore (Karnataka)and Tirupur & Kanchipuram (Tamil Nadu).

(xiv) T extile Centres InfrastructureDevelopment Scheme (TCIDS) :Development of infrastructure facilities atpre-dominantly textile/apparel sector areasis one of the thrust areas of NTxP-2000.For attaining this objective, a new scheme(TCIDS) has been launched for upgradinginfrastructure facilities at important textilecenters and its guidelines have beenfinalised. The Government has recentlyannounced (in December, 2002)modifications in the scope and fundingpattern of TCIDS with a view to bringing inurgency in implementation of the Scheme.The central assistance under the Schemewas earlier allowed upto 50% of the criticalcomponents of the project subject to amaximum of Rs. 20 crores for each area.Under the modified scheme, the centralassistance would be available to the extentof 100% of critical component of the projectin respect of Common Effluent TreatmentPlant, improving water supplies anddrainage facilities and construction of crèchebuilding for apparel units, whereas the other

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components would be funded on 75 :25basis between center and states/ agencies.Two TCIDS projects proposed for upgradinginfrastructure facilities at Sircilla, Distt.Karimnagar (Andhra Pradesh) and Panipat(Haryana) have since been sanctioned.

(xv) Export Market Support Scheme:Over the past few years, India’s textileexports to the European Union, Korea,South Africa etc. have been facing anti-dumping and anti-subsidy investigations.The anti-dumping (AD)/anti-subsidy (AS)investigations against Indian textile exportsare increasing gradually. AD/AS cases arehighly technical, legal and procedural and assuch defending these cases imposes aheavy financial burden on the concernedIndustry/Associations/Exports PromotionCouncils (EPCs). Therefore, a need hasarisen to create capacities within theindustry for meeting them knowledgeableabout the domestic as well as internationallaw regarding various trade defencemeasures. To provide funding support forsuch efforts, a provision of Rs. 9 crore forXth Plan (Rs. 2 crore for 2002-2003) underthe nomenclature ‘Export Market SupportScheme’ has been made in the Ministry’sbudget.

(xvi) Organisation of buyer-sellermeets / fairs in the country as well asabroad : The textile export promotioncouncils have been regularly conductingseminars, organizing buyer seller meets,participating in exhibitions abroad to promotetextile exports. Besides, events likeTEXSTYLES India, Handicrafts and Gift Fair,India International Garment Fair are alsoorganized in the country to provide anexposition of India’s capabilities in textile and

clothing sectors to the visiting foreignbuyers.

IMPORTANT DEVELOPMENTS ININTERNATIONAL TEXTILE TRADE

(i) Discussion on textile issues inthe WTO Committee on Trade in Goods:Substantive discussions took place onimplementation proposals relating to textilesin formal meeting of the Council for Tradein Goods held during June, 2002. At themeeting, US and Canada made detailedinterventions opposing the twoimplementation proposals on textiles. Indiareminded members that two textile relatedimplementation proposals were part of theoverall package negotiated by Ministers atDoha. If the intention was not to take anyaction on two tirets, the Ministers wouldobviously have not incorporated paragraphs4 in the decision on implementation relatedissues and concerns. Textiles and clothingsector was a major segment of the Indianeconomy and was important both for exportearnings as well as employment generation.Some of the other developing countries alsointervened expressing views similar to India.However, due to the stiff opposition of therestraining countries the CTG could notdecide to make any recommendationon implementation issue of ‘growth-on-growth”.

ANTI-DUMPING CASES ON EXPORTSOF TEXTILE PRODUCTS FROM INDIA

(i) EU’s anti dumping duties onCotton Type Bedlinen items: Pursuant tothe Agreement reached between India andEC on 26-04- 2001, EC agreed toimplement by 14th August, 2001the decisionof the Appellate Body WTO Appellate Body

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in the Indo-EU dispute on anti-dumpingduties by EU of cotton type bed-linenoriginating inter-alia from India. EC issueda Regulation on 7.8.2001, reducing the anti-dumping duties and suspending collectionof those duties. These measures could getterminated automatically in six months time,provided no interested party requested forits review. However, EC received a requestfor partial review of the AD measures; andjust before the expiry of the measure, ECnotified initiation of the review of themeasure. India gave a consultation callunder the Dispute Settlement Mechanism ofWTO, pursuant to which consultations wereheld with EC on March 27, 2002. Indiaraised a number of questions andemphasized that the interim review shouldbe terminated. However, the EC maintainedthat the partial interim review cannot beterminated. As the consultation failed, Indiarequested for setting up of a CompliancePanel. The Compliance Panel wasestablished on 22-05-2002. TheCompliance Panel held meeting with India,EC and third parties on September 10-11,2002.The Compliance Panel of WTO in itsReport dated 1.11.2002 has concluded thatEC’s definitive anti-dumping measure onimports of bed linen from India is notinconsistent with the AD Agreement or theDSU. The Panel observed that EC hasimplemented the recommendation of theoriginal Panel, the Appellate Body and theDSB to bring its measures into conformitywith its obligation under AD Agreement.Against the Report of the Compliance Panel,the Government of India made appeal to theAppellate Body. USA, Japan and Korea alsomade submissions to the Appellate Body as

third parties. The hearing of the AppellateBody was held on 20.2.2003.

(ii) Anti-dumping / anti-subsidyproceedings by EU on imports of PTYfrom India: On the basis of a complaintfrom Comite International De La Reyonne EtDes Fibres Synthetiques (CIRFS), the EChad initiated Anti-dumping and Anti-subsidyinvestigations against imports of PolyesterTextured Yarn (PTY) originating inter-alia inIndia. The Anti-subsidy investigations werecontested in co-ordination with the Synthetic& Rayon Textiles Export Promotion Council(SRTEPC). The Council co-ordinated thedefense of Indian exporters in the anti-dumping investigations.

EC vide its Regulation No. 1411/2002 dated29-07-2002 and 1412/2002 dated 29-07-2002 published in Official Journal of EC on02-08-2002 announced provisionalcountervailing and anti-dumping duties. Asper the EU legislation no product shall besubject to both anti-dumping andcountervailing duties for the purpose ofdealing with one and the same situationarising from dumping or from exportsubsidization. Therefore, the subsidymargins have been reduced from theDumping margin to arrive at anti-dumpingduty ranging from 8.1% to 19.1%.

The Indian Companies represented againstthis provisional determination. EU accordedhearing in the case on October 7, 2002.The representatives of Synthetic & RayonTextile Export Promotion Councilparticipated in the hearing to convince theEU authorities that there was no evidenceof injury to the EU’s domestic industry.However, The EC has disclosed the final

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duties on 10-10-2002. As per the finaldisclosure, the revised anti-dumping dutyranges between 3.7 - 7.9%.

(iii) Anti-dumping investigation byGovernment of Venezuela againstimports of readymade garment inter-aliafrom India:

The Anti-Dumping Commission (ADC),Ministry of Commerce, Government ofVenezuela on 10-09-2002 initiated an anti-dumping investigation on import ofreadymade garments from a number ofcountries including India. Apparel ExportPromotion Council (AEPC) has been askedto coordinate filing of reply, engagement oflawyer, etc. AEPC in consultation with theTrade, is taking appropriate action to defendthe case.

(iv) Anti-subsidy complaint filed withEC against imports of bed linen fromIndia:

A complaint for initiation of anti-subsidyinvestigation was lodged with EC on04.11.2002 by the Committee of the Cottonand Allied Textile Industries (Eurocotton).Some Schemes of Government of Indiasuch as DEPB, 80 HHC of Income Tax, etc.were alleged to be subsidizing the exportproducts.

As per the relevant provision of the WTOAgreement, a pre-initiation consultationmeeting was held between Govt. of Indiaand EC on 10.12.2002 at Brussels. The ECvide its Notice No. 2002/C316/04 dated18.12.2002 initiated anti-subsidyinvestigation on bed linen from India. The EChas asked the Indian Government/exporters

to furnish certain details on thequestionnaire supplied by the EC.

BILATERAL TRADE ISSUES

(i) EU’s bilateral agreementsregarding quota/GSP benefits:

The scheme of Generalised System ofPreferences (GSP) of the European Union(EU) for the period 1st January 2002 to 31st

December 2004 inter-alia provides forsuspension by the EU of customs duties forall products which have not graduated,under special tariff arrangements to combatdrug production and trafficking. Pakistan isone of the beneficiary countries under thisspecial arrangement. As this may adverselyaffect India’s exports to EU India had takenup this issue with EU through bilateralconsultations held in February 2002. Duringthe consultations it was highlighted that Indiawould stand to lose substantial trade,particularly in the textiles and clothingsector, on account of duty concessionsgiven selectively to Pakistan. The EU wasrequested to rectify the adverse tradeimpact due to such concessions. Thebilateral consultations did not however yieldthe desired results from India’s point of view.As the first step to resolve the abovedispute with EU, under the DisputeSettlement Mechanism of WTO, it wasdecided to seek consultations with EU. Theconsultations were held with EU on 25th

March 2002 during which certain detailsregarding adverse impact on our trade wereconveyed to the EU. These consultationshave however not led to positive results.Another round of consultations was heldwith EU on 9th July, 2002. The EU has notyet addressed our concerns in this regard.

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While we are still open to remidial actionfrom the EU side, India sought theestablishment of a panel in the dispute. TheDispute Settlement Body (DSB) has, duringits meeting on 22nd January, 2003,established the panel to examine India’sclaim in the dispute.

(ii) India-Nepal Treaty of Trade: Therehave been repeated representations fromthe indigenous industry regarding increasedimports of acrylic yarn from Nepal underIndo-Nepal Treaty of Trade. Under thisTreaty, duty free import of certain textileitems including acrylic yarn is permissible.DOC had series of discussion with Govt. ofNepal. As a result of these discussions,DOC made certain amendments in theIndia-Nepal Treaty of Trade. As per therevised Treaty, a quantitative ceiling hasbeen prescribed for a few items includingacrylic yarn for duty free import from Nepal.Such imports would be regulated throughdesignated Land Customs Stations. Aceiling of 10,000 MTs of acrylic yarn hasbeen prescribed on annual basis. TextileCommittee has been assigned the task ofmonitoring the imports of acrylic yarn.

(iii) Indo-Sri Lanka Free TradeAgreement (FTA): India has entered into aFree Trade Agreement (FTA) with Sri Lankawhereby India has agreed to allow import of8 million pieces of apparel articles from SriLanka on concessional duty basis. Out of8 million pieces, 6 million pieces shall bemanufactured from fabrics of Indian origin(imported from India). There will be nocondition of sourcing of fabrics from Indiafor the remaining 2 million pieces. In orderto review the progress of FTA, a JointMinisterial Committee (JMC) meeting was

held between the Commerce Ministers ofIndia and Sri Lanka in New Delhi on07.06.2002 which was preceded by theCommerce Secretary level meeting on06.06.2002. Pursuant to the decision of JointMinisterial Committee (JMC), furtherdiscussions were held in Colombo tofinalize, as a package, all issues relating toTea, Cement, TRQ of Tea and garmentsand change in Rules of Origin in July 2002.The brief of Agreed Minutes of the meetingheld from 04th-05th July in Colombo, SriLanka concerning MoT is indicated below:

l Sri Lanka had furnished a list of 51items for deepening of concessions from50% to 75% in pursuance of Free TradeAgreement signed between India and SriLanka. The contention of Sri Lankanauthorities was that these items have beensubjected to both ad-valorem and specificduty on which ever higher basis. Since thespecific duties on these items have beenquite high, deepening of concessions wasrequested by the Sri Lankan Government.India agreed with the proposal of Sri Lanka.However, it was reported that only 38 itemsattract both ad-valorem and specific duties.Further deepening of concessions wasconsidered in the case of such items only.

l Removal of restriction on 6 millionpieces of garment quota. India agreed toincrease the unrestricted quota of 2 millionpcs. in respect of which fabric of non-Indianorigin is used when Sri Lanka fully utilizesthis quota. On utilization of the unrestrictedquota India agreed to give additional quotaof 2 million pcs. out of total 8 million pcs..India further requested the Sri Lankan sideto use 6 million pcs. quota linked to use ofIndian fabric.

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l Sri Lanka’s request for additionalPorts. Against the request of Sri Lanka toprovide additional ports of Calcutta, Cochin,JNPT (Mumbai) and Vizag as entry pointsfor garment to India, Indian side agreed toinclude Calcutta and JNPT (Mumbai).

l Removal of 1.5 million pcs.stiputation. India agreed to increase the levelfrom 1.5 million to 2 million pcs. per categoryper annum.

l Re-classifying knitted gloves underIndia’s residual list. Sri Lanka emphasizedits desire to place knitted gloves underIndia’s residual list. India indicated that allitems under the HS code in Chapter 61 &62 have been included and thereforeremoval of this item alone is not practicable.India agreed that in the event of full utilizationof quota, the request would be considered.

(iv) Ban on imports of cotton yarnthrough the land route and impositionof 10% regulatory duty on import of alltypes of cotton yarn from India by Govt.of Bangladesh : The Government ofBangladesh imposed a ban on import ofcotton yarn through the land route. This hasbeen imposed on the basis of arepresentation made by the BangladeshTextile Mills Association (BTMA) as thesales of cotton yarn produced by localspinning mills have been affected due tosmuggling of cotton yarn across the Indianborder and also dumping of cotton yarn bythe Indian producers. The Bangladesh Govt.imposed a regulatory duty of 10% on importof all types of cotton yarn to protectdomestic cotton industry. With theimposition of this duty, the effective rate ofimport duty on cotton yarn has increased to

approximately 40% from the present29%.This issue was discussed with Govt.of Bangladesh during the visit of an Indiandelegation led by Commerce Secretary toDhaka from April 7-10, 2002. TheBangladesh Government has agreed to lookinto the matter favourably.

NIFT

National Institute of Fashion Technology(NIFT) was registered as an AutonomousSociety in 1986. It is a Government fundedinstitution under the Ministry of Textiles withSecretary (Textiles) as Chairman of theBoard of Governors (BOG). Besides theChairman, there are 16 members on theBoard of NIFT, including the Director Generalwho is the Chief Executive Officer of theorganisation.

NIFT was established in collaboration withthe Fashion Institute of Technology (FIT),New York. The genesis of NIFT was in theidea of an apex institution to cater to thegrowing needs of India’s evolving fashionindustry. Over the years, NIFT has emergedas the premier training institute in Indianurturing and creating bright generations ofprofessionals in different areas of fashiontechnology, meeting the human resourcerequirements of this vital industry. Its highlevel of interaction and collaboration with theleading fashion institutions of the world hasenhanced the stature and scope for thefashion industry in India to meet thechallenges of the industrial competitivenesson a global plane.

Between 1986-95, NIFT was a single unitentity at Delhi offering a varied range of fulltime programmes and professionalcourses. Beginning from July, 1995 NIFT

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has set up under its umbrella six otherCentres located at Bangalore, Calcutta,Chennai, Gandhinagar, Hyderabad andMumbai. These Centres have a Director in-charge who is assisted by a Registrar anda nucleus staff; Director General beingresponsible for the overall coordination andmonitoring of the activities of these Centres.The Centres are under the commonmanagement of the BOG.

The State Level Management Committee(SLMC) of each Centre, consisting ofrepresentatives from the Government,Industry and having the Chief Secretary asits Chairman, acts as a link among theIndustry, NIFT Centre, State and CentralGovernments. The Registrar of the Centreis the designated Member-Secretary of theSLMC.

MAJOR LANDMARKS OF NIFT DURING2002-03

l NIFT has taken initiative for ClusterDevelopment Programmes with theactive support from Ministry of RuralDevelopment, Office of DC(Handicrafts), DC (Handlooms) andNCJD. Series of Seminars are alsobeing organised to discuss the variousissues threadbare with all thestakeholders.

l The Annual Faculty Conclave – 5th inseries - was held at New Delhi from23rd to 25th May 2002, during whichvarious academic issues and concernswere discussed threadbare.

l Various Working Groups wereconstituted to address the issues andconcerns of NIFT and the reportssubmitted by these groups are under

active consideration of DG, NIFT.

l Class-room facilities, library andresource facility of all the NIFT Centresare being strengthened keeping in viewthe requirements of the Centres, afterintroduction of the new courses.

l Various programmes for the benefit ofthe industry, in co-operation with theNGOs / State Governments are beingundertaken by NIFT regularly, which areon-going activities.

l Computer Education Programme:The Computer Centres in all the NIFTCentres have been equipped withnecessary hardware and software tocope up with the requirements aftertaking into consideration the newcourse(s) started in all the Centres.

l Building and other facilities at NIFTCentrs: The second phase ofconstruction work in NIFT, Calcutta andHyderabad is in progress. The 1st

phase of construction work at Chennaiand Bangalore has been completedand the 2nd phase is is under progress.The formal inauguration of NIFT,Chennai campus was done during July2002. These two Centres have shiftedthe operation in their own premises. Thework for construction of theGandhinagar campus has beencommenced and the work is underprogress.

l NIFT, Mumbai has shifted to thepremises acquired from ApparelTraining & Development Centre(ATDC), in Kharghar, Mumbai andfurther works to suit the needs of NIFTis in progress.

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TEXTILES COMMITTEE

Textiles Committee, established under theTextiles Committee Act, 1963, has theprimary objective of ensuring quality oftextiles both for internal marketing andexports. Its functions include promotion oftextiles and textile exports, research in thetechnical and economic fields, establishingstandards for textiles and textile machinery,setting up of laboratories, data collection etc.

The Textiles Committee besides itsHeadquarters at Mumbai, has 30 RegionalOffices, with 18 of them with laboratories,including 9 eco testing laboratories. TheCommittee has the following functionaldivisions at headquarters, Mumbai (1)

Textiles Inspectorate Wing (2) TextilesLaboratory Wing (3) Market Research Wing(4) ISO Wing (5) Vigilance Cell (6)Accounts Wing, and (7) Administration andCo-ordination.

During the year 2001-02, the Committeeremitted to the Government of IndiaRs.3631.58 lakh towards the cesscollection, whereas the funds received bythe Committee for its budgeted expenditureduring the said financial year wasRs.1799.00 lakh. Apart from the cesscollected, the Committee also generatedRs. 1064.08 lakh internal receipts and Rs.191.28 lakh for issue of GSP certificates.

For the first time, the Committee has taken

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up client funded industry specific surveysduring the year 2001-02. Some suchimportant surveys are: 100% survey ofcotton ginning & pressing factories fundedby Technology Mission on Cotton; surveyto assess the consumer preferences forjute bags funded by Jute ManufacturersDevelopment Council; survey ofhandlooms in Orissa funded by

Government of Orissa, etc.

Another notable achievement during 2001-02 was accreditation of 5 of theCommittee’s laboratories under NationalAccreditation Board for Laboratories (NABL).With these, a total number of accreditedlaboratories under the Committee stood at8. Further, an inter-laboratory proficiencytesting has been initiated.