Ankara, Sept. 9 India has called for early resolution of the ongoing row with Turkey on safeguard duties that Ankara has imposed on Indian textile exports. Such duties restrict import of certain goods into the country that levies it (Turkey in this case) and protects some domestic players.
New Delhi wants the issue to be settled at a bilateral level, rather than taking it to the World Trade Organisation’s (WTO) Dispute Settlement Body.
The Commerce and Industry Minister, Mr Anand Sharma, told Business Line, “I informed the Turkish authorities that since we both (India and Turkey) are committed to deepening our economic engagement and are members of WTO who are complying with all the multilateral norms, we should resolve these (disputes) in the spirit of goodwill and without seeking redressal at other fora.”
Mr Sharma is in Turkey to hold the ninth session of India-Turkey Joint Committee on Economic and Technical Cooperation (JCETC). The Minister, who held separate meetings with Mr Mehmet Aydin, State Minister in charge for Science, Technology and Information, as well as co-Chairman of JCETC from the Turkish side, said he was reassured by the positive understanding expressed by Mr Aydin and his colleagues on the issue.
After the imposition of the safeguard duty — due to which effective duty on cotton yarn has risen to 30 per cent — the exports from India have declined from $249 million during July 2008-June 2009 by 79.5 per cent, Mr Siddartha Rajagopal, Executive Director, Cotton Textiles Export Promotion Council, told Business Line.
Further, India has now slipped to second rank from its earlier top position as supplier of these products on account of these trade restrictive measures, he said.
The issue
“India needs to maintain the pressure on Turkey so that these safeguard measures are removed at the earliest, failing which India will have to seek redressal at WTO,” Mr Rajagopal said.
If India takes the issue to WTO and wins the battle there, it can ask for compensation from Turkey. If Indian exporters are on the right side of the law, India could also impose retaliatory measures.
The safeguard duty is applicable on all spun yarns. “Due to imposition of safeguard duties, exports from our company have slipped by 70 per cent. Besides this duty, we have to shell out an additional 3 per cent for the deferred payment system. This makes our exports non-competitive,” said Mr Amit Lath, CEO, Sharda Group of Companies, a textile exporting firm that has offices in Turkey.
FTA Joint Study
Also, Turkey is charging more duties on Indian fabrics than it does on such products from Pakistan, Uzbekistan and Thailand, he said.
Meanwhile, India has decided to form a Joint Study Group (JSG) to study the feasibility of entering into a Free Trade Agreement (FTA) with Turkey. The declaration that both sides will consider the establishment of the JSG was made during the visit of Turkish Prime Minister to India in November 2008.
Both countries have named the co-Chairs and terms of reference will be brought out by October-end, Mr Sharma said. He added that the intention was to link the FTA by mid-2010.
Widen trade basket
The FTA on trade in goods will later be extended to trade in services as well as co-operation in investment. Both the sides have agreed on the general terms of engagement to deepen multi-sectoral economic relations, the Minister said.
He said that so far, India-Turkey trade was restricted to traditional sectors such as chemicals, textiles and leather, adding that there was a need to widen the trade basket. Mr Sharma also urged Indian businesspersons at a FICCI meet to use Turkey has a gateway for capturing Central Asian, European and African markets. Turkey is a member of the Customs Union with European Union since 1996.
He said India and Turkey can enter into strategic partnership to capture third country markets. Both countries would also co-operate in contracting and consultancy, tourism, science and technology, energy, transportation and leather, the Minister said.
In this regard, FICCI jointly organised the India Turkey Business Cooperation Meeting with Union of Chambers and Commodity Exchanges of Turkey (TOBB) and Ankara Chamber of Industry.
Source : Business Line