NEW DELHI, July 23: The export of grey cloth, reportedly by some Indian exporters, as processed fabric is the primary reason for the European Commission's launching fresh anti-dumping investigations into unbleached cotton fabrics (UCF) shipments from India, industry experts say.

``The seizure of such fabric at London has forced the EC to be convinced that European Union (EU) council of ministers was prejudiced in shooting down the definitive anti-dumping duty imposed on UCF exports earlier this year,'' they said.

The grey fabric had been found dyed with confectionery dye, which could be washed off before processing, they said.

The experts made these observations during a round table discussion on ``Anti-dumping laws and procedures: challenges ahead', organised by North India textiles mills association (Nitma) on Monday.

The EC has launched fresh investigations on July 11 on a complaint by the Euro-cotton that India and five other countries, including Pakistan, had resorted to unfair methods in exporting UCF to the EU.

``May be, the clandestine export could have been made to avoid the quota system instead of escaping the provisional anti-dumping levy, which was in effect then. Maybe, it could have been done by a couple of exporters only but the entire nations is facing the consequence'', they said. A legal expert Lakshmi Kumaran, said the other reasons for the EC to agree for the fresh investigations were the increase in exports from India and other countries and a fall in the market share of the indigenous industry in EU.

Actually, the EU had not dropped the move to impose definitive anti-dumping duty on UCF exports but it had only decided not to implement it in the interest of the European community after determining that there was a cause for levying the duty, he said.

It would be an `onerous' task for India to prove that no injury had been caused to the EC industries as the interpretation by the authorities were totally different, the expert said.

One of the arbitrary ways of the anti-dumping proceedings was that the EC usually chose for consideration only a few transactions where dumping would have taken place, while ignoring the majority transactions which were fair, he said.

The entire exporters from a country had to face the levy, even if the EC finds faults in only a few transactions, Lakshmi Kumaran said and added that sampling method followed by the commission was also faulty.

``It would be better, if India proceeds in this issue on the assumption that it does not have a strong case and makes effort to minimise the levy'', he said.

Out of the 125 persons exporting UCF to EU, at least 100 were merchant exporters and no investigation had been prescribed for them by the EU, Lakshmi Kumaran said.

The rest 25 comprised the manufacturing exporters and the EC should be asked to consider these exporters as two sets of people- those comprising the composite mills and the others representing the powerloom, he said.

India could seek two separate sampling for these two sections as the scale of economy for these differed, he said and added that this could help in largely bringing down the anti-dumping levy, which the EC was determined to impose.

The industry was also asked to act fast as hardly 10 days remained for India to reply to the complaint lodged by Eurocotton.

A leading UCF manufacturing exporter SP Oswal said the export associations and federations representing the industry were inadequately prepared to face such proceedings. The anti-dumping procedures against UCF has been initiated for the third time. While the Euro cotton withdrew its first complaint but made much headway in its second complaint, which resulted in provisional levy being imposed before the EU decided not to implement it.

Following this, the third complaint was launched at the initiative of France. The provisional levy was not made definitive as some of the EU members felt it would hurt them in the long run.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.