The move, expected to take a concrete shape after the second round of discussions with the European Union, one of India's major trade partners, is in line with the Indo-EU bilateral textile agreement.The agreement provides that ad valorem or specific rates of duty, whichever is higher, can be imposed.

Textiles ministry sources told The Financial Express that the venue for the second round of talks to be held this month was yet to be decided. The first round was held in Geneva some time ago.

Sources explained that the specific rates of duty would be determined in relation to the EU's export prices, the data for which was expected from the Union.

Following the agreement which has also been signed with the US, the import of fibres, yarns and some fabrics has been brought under open general licence (OGL) from January 1, 1995.

Theimport of other fabrics, select made-ups and apparels will be allowed against special import licences (SIL) from January 1, 1998 in some cases and in others, from January 1, 2000 and January 1,2002.

Therefore, there is no immediate threat of India being swamped by import of cheap fabrics and garments.

The agreements signed after protracted negotiations in New Delhi and Geneva had stipulated that India would offer tariff reductions/bindings on imports of the above products in a phased manner beginning January 1, 1995 in return for greater market access in the US and EU.

The agreements had envisaged imports of all fibres, except polyester staple fibre, at a tariff rate of 35 per cent, of yarns as well as certain industrial fabrics at 40 per cent each, of other fabrics at 45 per cent, of made-ups at 40 per cent and of apparel items at 50 per cent.

With the complete phase-out of the multi-fibre arrangement (MFA) by the year 2005, the quota regime followed by the developed countries, including the US andthe EU, will no more be in vogue.