The European Union decided to block import of textiles items from India for which additional quotas of 7,000 tonnes had been provided.

A consignment of over 31 lakh (3.1 million) sweat shirts, estimated to be worth around Rs 75 crore (Rs 750 million), was put on embargo by EU authorities, industry sources said. The consignment, the first of the additional 7,000 tonnes quota sanctioned to India, was still in transit.

Chairman of Apparel Export Promotion Council Virendra Uppal confirmed the development and said steps had been initiated to ensure that the consignment reached EU shores on time and that Indian exporters were not affected.

The government was in touch with EU authorities in Brussels, textiles ministry officials said. Uppal was confident the problem would be sorted out in 10 days.

The EU had released special category quotas for various products with a cap of imports up to 7,000 tonnes. Quotas were issued to Indian exporters by AEPC following the EU decision and the exporters were in the process of dispatching their consignments.

Uppal, however, said EU authorities did not credit the additional quotas to Indian exporters and, therefore, stopped the consignment. "It is our right and the problem would be sorted out soon," he added.

Textiles exports from India have, however, been a contentious issue, with the EU expected to release anti-subsidy findings against bed linen. The two trading partners had earlier been involved in a bitter wrangle over anti-dumping duties imposed by the EU on bed linen.

Certain sections within the government view the latest action by Brussels as an arm-twisting tactic in the wake of India's stiff opposition to the EU stand on agriculture reforms under the World Trade Organisation and its demands for inclusion of non-trade issues such as investment, competition policy, trade facilitation and transparency in government procurement on the agenda for negotiations.

After the US, the EU is a big market for Indian textiles exports. On an average, 80-85 per cent of the quotas allotted to Indian exporters by the US and the EU had been utilised between January and October this year.

Hidden tactics

• A consignment of over 31 lakh sweat shirts worth Rs 75 crore put on embargo by EU authorities.
• The government in touch with EU authorities in Brussels.
• AEPC confident matter would be sorted out in 10 days.
• Textiles exports from India have been a contentious issue, with the EU expected to release anti-subsidy findings against bed linen.
• EU action viewed as an arm-twisting tactic in the wake of India's stiff opposition to the EU stand on agriculture reforms at Cancun trade talks.