Strong protests from the Indian government have apparently forced Egypt to withdraw additional import duty on Indian cotton yarn, fabric and sugar.
The additional duty, imposed by the North African nation in January 2009, was hampering export of Indian goods to the country. This included 50 cents on every kilogramme of cotton textile and $1 for every kilogramme of processed sugar. The domestic industry complained about the imposition of the additional duty to the Ministry of Commerce and Industry, which took up the issue with Egyptian authorities. The additional duty was in violation of the norms prepared by the World Trade Organization (WTO).
This was because the total import duty on the products exceeded Egypt’s commitment to the WTO, which is not permissible. A country cannot arbitrarily impose additional import duty, unless it proves through WTO-approved measures that the surge in imports is harming its domestic industry.
Egypt charges 5 per cent import duty on cotton and mixed yarn and 10 per cent on cotton and mixed woven fabrics.“Indian cotton yarn exports to Egypt are a very significant component and rank first in Egypt’s import of that commodity, besides being India’s top exports to Egypt,” a commerce ministry release said.
Turkey has also imposed additional import duty on cotton yarn. Commerce ministry has started consultations with its counterpart in Turkey in this regard.
India’s exports have been falling for the five months ended February 2009, due to a wilted global demand for products in the backdrop of the global financial crisis.