EU's recent revision of generalized system of preferences (GSP) scheme has excluded Indian textile exporters from availing the benefits. However, the garment exporters will continue to enjoy preferential access to the 25-nation EUropean Union (EU) market until the end of 2008. This will definitely brings some relief since it was feared that both Indian textile and Clothing would be excluded from the GSP scheme earlier. Groups of products from a beneficiary country which in a given sector account for more than 15% of EU imports from GSP countries are "graduated" and cease to benefit from preferential access. This "graduation threshold" for textiles and clothing has been set at 12.5%, which automatically eliminated India's textile products from the GSP beneficiary list. Thirteen of the EU members wanted this graduation threshold to be brought down to 10 percent. However, if it would have come in to affect, India's clothing exports would also have lost the GSP status. On the other hand, our neighbor and competitor Pakistan would continue with the benefits.
Since EU is in the process of simplifying the rules or origin, there would be chances that garment
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| manufacturers around India would be allowed to source fabric from the SAARC countries which would possibly set off the shrink in demand. Another adversely affected exporter is China which would be excluded from the revised GSP scheme for 80 percent of its exports, including textiles and clothing.
India is emerging as the second most competitive textile and clothing nations after china, there could be such measures even from other importing nation. In the first six months, after the demise of the quota system, India has done fairly well in the textile sector, which we could expect to perform much better in the coming years. On going investment in the textile sector is expected to bring reasonable level of integration as well as economy of scale to the textile manufacturing operations in the country. This would also improve the cost competitiveness of the Indian manufacturers and offer better services to overseas buyers. So, with the improved export performance, there would also be higher chances of facing hurdles in the form of anti dumping duty or Non Tariff Barriers from the importing nations. It is inevitable and better to consider the possible restrictions as a part of the trade challenges to further enhance its competitiveness. 
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