Peru drops safeguard duty on Indian yarn

MUMBAI: Indian cotton yarn exporters would not have to pay an additional duty for exporting their products to Peru as the South American nation has decided to drop duty on import of cotton yarn. The efforts made by the Cotton Textiles Export Promotion Council (Texprocil) and diplomacy by the Indian embassy have led to the Peruvian authorities deciding not to impose any safeguard duty on import of cotton yarn into that country. Shipments of cotton yarn from India would now continue without any encumbrances.

���Being the largest supplier of cotton yarn to Peru, with a share of over 80% in total Peruvian cotton yarn imports, Indian cotton yarn exports would have been severely impacted in case the safeguard duties were imposed,��� Texprocil chairman VS Velayutham said in a statement here.

Exports of cotton yarn from India reached a level of $94.45 million during 2008, recording an impressive growth rate of 73.62%. On account of the safeguard duty, imports of cotton yarn from India during January-June 2009 recorded a sharp decline reaching a level of $24.79 million. It may be recalled that aggrieved by the economic downturn, cotton yarn producers in Peru represented by Sociedad Nacional de Industrias (SNI) filed a complaint with the National Institute for the Defense of Competition and Protection of Intellectual Property, claiming that rising imports of cotton yarn were causing a threat to the domestic cotton yarn producers in Peru.

They also requested for imposition of safeguard duties on imports of cotton yarn from all countries, including India.

On behalf of the Indian cotton yarn industry as well as exporters of cotton yarn to Peru, Texprocil made itself known as an interested party in the safeguard investigation, initiated under the WTO agreement on safeguards, and participated in the proceedings.

���The excellent commercial diplomacy undertaken by the Indian embassy in Peru and the effective arguments made by Texprocil led to the Peruvian investigating authority dropping the proceedings without imposing any safeguard duty,��� the statement said.

���The excellent support extended to us by the ministry of textiles and ministry of commerce enabled us to take up the cause of Indian cotton yarn exporters before the Peruvian authorities,��� Mr Velayutham said.