Turkey has removed penal duties ``wrongfully’’ imposed on cotton yarn from India in line with an agreement reached between the two countries.
Indian cotton yarn will no longer attract safeguard duties — a levy imposed to curb a surge in import of specific commodities — ranging between 12 and 17 per cent with effect from August 4, 2011, for a period of three years.
The Indian industry is hopeful that the measure would act as a shot-in-the-arm for exports of cotton yarn to Turkey that had plummeted following the imposition of safeguard duty in 2008.
“The withdrawal of the safeguard measures on imports of cotton yarn to Turkey augurs well for exports of cotton yarn from India, which have declined sharply since 2007,” Manikam Ramaswami, Chairman, Texprocil, said
Exports of cotton yarn fell to $94.57 million in 2011 from $198 million in 2007, according to figures furnished by Texprocil. The decline was steeper in 2012 with exports dropping 75 per cent during January–October 2012 to $20.77 million from $85.30 million in the comparable period of 2011.
The decision taken by the Turkish Government on December 31, 2012, to repeal the safeguard duty on Indian cotton yarn followed the withdrawal of a case filed at the World Trade Organisation (WTO) by India against the “illegal” duties.
India had argued that extension of safeguard duties on cotton yarn imposed by Turkey in 2008 for a period of three years without carrying out a review flouted WTO rules. The two countries carried out consultations on the matter in March this year when New Delhi pointed out that Turkey had breached safeguard provisions of the General Agreement on Trade and Tariff and the WTO Agreement on Safeguard Measures by illegally extending duties after the original period for which the safeguard measure was put in place had expired.
“India withdrew the case at the WTO after Turkey promised it would remove the safeguard duties by the year-end. We are happy that they have honoured the commitment,” a Government official said.