MEMORANDUM OF UNDERSTANDING between the European Community and the Republic of India on arrangements in the area of market access for textile products

1. Delegations of the Government of India and the European Community held consultations in Brussels on 10 to 12 December and 30 and 31 December 1994 in order to pursue their discussions on market access for textiles and clothing products.

2. The Government of India will bind its tariffs on the textiles and clothing items listed in the Attachment at the rates and according to the timetable indicated therein. These rates will be notified to the WTO Secretariat within 60 days of the date of entry into force of the WTO. As in the case of tariff commitments already entered into by India in respect of certain textile products as a part of the Uruguay Round process, these additional tariff binding offers referred to in the Annex will be subject to the condition that if the integration process envisaged in Article 2, subparagraphs 6 and 8 of the WTO Agreement on Textiles and Clothing does not materialize in full or is delayed, duties will revert to the levels prevailing on 1 January 1990. Furthermore, the Government of India may introduce alternative specific duties for particular products contained in the Annex. The duty leviable on such items will be indicated as a percentage ad valorem or an amount in Rs per item/square metre/kg, whichever is higher. In determining the level of such specific duties the Government of India shall take into account relevant export price data to be provided by the EC. If the EC considers that such duties are having an adverse impact on its exports of the products in question, the Government of India agrees to consult promptly with the EC upon request in an effort to address the concerns raised in a mutually acceptable manner.

3. The Government of India will provide market opening via the removal of all quantitative restrictions affecting the items listed in the Annex by the dates indicated therein.

4. Having noted the concerns expressed by the European Community in this regard, the Government of India confirmed it does not apply any measures which constitute a dual pricing policy for the export of raw cotton from India.

5. The European Community agreed to remove with effect from 1 January 1995 all restrictions currently applicable to India's exports of handloom products and cottage industry products as referred to in Article 5 of the EC-India agreement on trade in textile products.

6. As of the date of the entry into force of the WTO and for each quota year thereafter, the Commission will give favourable consideration to requests which the Government of India might introduce for exceptional flexibilities, in addition to the flexibilities applicable under the bilateral textiles agreement, for any or all of the categories under restraint, up to the following amounts for each quota year:

>TABLE>

The Government of India will invoke such exceptional flexibilities in the order of carry-over, inter-category transfer and carry-forward, to the extent of the possibilities existing on the basis of the utilization of quotas. Moreover, in each quota year the total amount of exceptional flexibilities shall not exceed 2 500 tonnes for any particular textiles category or 3 000 tonnes for any particular clothing category.

7. This MOU is without prejudice to the right of either Party to pursue any matter covered by it under Articles XXII or XXIII of the GATT.

8. The Government of India and the European Commission will hold consultations periodically in order to ensure proper implementation of this Memorandum of Understanding.

Por la Comunidad Europea

For Det Europæiske Fællesskab

Für die Europäische Gemeinschaft

Ãéá ôçí ÅõñùðáúêÞ Êïéíüôçôá

For the European Community

Pour la Communauté européenne

Per la Comunità europea

Voor de Europese Gemeenschap

Pela Comunidade Europeia

Euroopan yhteisön puolesta

På Europeiska gemenskapens vägnar

>REFERENCE TO A FILM>

ANNEX

>TABLE>