"The EU is of the view that various export promotion schemes in these countries are giving exporters excessive benefit which in turn hurts EU's domestic manufacturers, thus making out a case for anti-subsidy and anti-dumping duty" says OP Dhawan, advisor, Synthetic and Rayon Textile Export Promotion Council (SRTEPC).

The targeted Indian companies which include stalwarts like Reliance Industries, DCL Polyester, Raymond Synthetics and Indo Rama will be helped by SRTEPC in selecting the counsel in Brussels and preparing the defence that they are not dumping and not causing injury to the domestic industry in the EU countries.

It is feared that the European Union will expand its area of inquiry since these export promotion schemes are applicable to almost all the textile goods.But according to government officials, the export promotion schemes are inaccordance with the World Trade Organisation (WTO) norms.

The Indian government therefore will fight the anti-subsidy case while individual exporters will have to defend themselves in anti-dumping cases.

At the moment, the EU is targeting some 26 texturised yarn exporters who are required to reply by the first of week of this month furnishing basic information regarding their company, products, domestic and export sales etc. Thereafter, few big companies with larger exports will be selected as representative of this group of companies and will be required to provide detailed inputs by the month end.

Based on the data, the European Union will investigate whether there is a case for anti-dumping duty for the country as well as individual firm. This would take 10-12 months.

The companies will jointly prepare the defence to cut down cost. The cases are to be presented at Brussels and will require engaging services of legal experts that are expensive. The costs are so high that smaller exporters prefer toremain silent and stop exporting to the EU countries.

The SRTEPC is giving guidelines in furnishing responses and the replies would be weighted by the council's lawyers and cost accounts to make them foolproof.