NEW DELHI, May 22: The European Union (EU) has rejected the European Commission's (EC) move to slap modified anti-dumping duty on exports of unbleached cotton grey fabrics from India and five other countries, industry sources quoting reports from Brazil, have said.

The council of EU ministers refused to entertain the modified duty, proposed at the initiative of France, at its meeting in Brussels yesterday, the sources told us.

It comes as a big relief to India as its exports of unbleached cotton grey fabrics amount to Rs 650 crore annually to the European nations.

The EC had imposed provisional anti-dumping duty ranging between 15.9 and 17.5 on unbleached cotton grey fabrics exports from India. The duty was made `definite' from March 15, though it was reduced to 15.3 % at the lower level and 17.2 % at the higher level.

Besides India, the countries against whom the duty was slammed were Pakistan, China, Indonesia, Turkey and Egypt.

The EC had time till May 20 to get the duty ratified by the 15-member EU council of ministers but it was rejected on May 15 with nine countries opposing the duty and six favouring it.

Following this, the EC, at the initiative of French President Jacques Chirac came out with a modified plan as per which, it said, the duty would be imposed for one year instead of five years and be reviewed the next year.

Industry sources said despite two rounds of discussions on May 16, the EU council of ministers failed to reach an agreement on the modified duty, especially with Britain opposing it tooth and nail.

The modified duty proposal was mooted by Chirac as he took it up as a ``prestige issue'' in view of the impending elections in France.

After failing to reach an agreement, the EC council of ministers were given time till yesterday to come to a conclusion. But with the members unrelenting in their stand, there was no other way but to drop the proposal.

However, as a sop to France, the EC might now impose provisional anti-dumping duty .

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.