China and India, Asia's two rising powers, are embroiled in a dispute after India decided to impose a tariff as high as 115.74 per cent on Chinese textiles, which some industry insiders say will deal a great blow to China's textile industry, reports the Beijing Times, June 16.

Chinese workers produce bras at a textile factory in Dongguan, southern China's Guangdong province February 19, 2006. Relations between the EU and China were dealt a blow last year by the 'bra wars' when Chinese-made clothing and textiles piled up in EU ports as the bloc temporarily halted imports of bras, socks and T-shirts from China. [Reuters]

A fifty-seven to 117.74 per cent tariff will be imposed on Chinese export textiles, 30 to 40 per cent higher than export prices, insiders told the Beijing-based newspaper.

China, dubbed the world's factory, has been a target of international trade conflict and is one of the biggest victims of anti-dumping measures due to low product and labor prices. Some countries complain surging exports will jeopardize domestic industries.

"It is not fair for India to make such a hasty decision and place such a large tariff on Chinese textile enterprises without first conducting an in-depth investigation, " says an industry insider, adding that India's anti-dumping laws contain holes and it abuses WTO rules on free trade.

A textile mill in East China's Jiangsu Province. One-third of the world's textiles are made in China, saying Xu Kunyuan, vice president of China National Textile Industry Council at China Textile Printing Technology Forum. The forum was held in Hangzhou on May 19, the development of China's Textile Printing industry meet the growing demand all over the world. [newsphoto]

"China will offer a price that both sides can accept and enables Chinese enterprises to export their products to India in the future," the insider says, without giving details on the proposal.

Some Indian, importers have expressed concerns about India's anti-dumping measures, which they believe will overshadow domestic industry, the newspaper says.

China is the biggest textile production and export base in the world, with 70 per cent of production exported to other countries. Meanwhile, India places second in terms of textile production but is also the biggest textile importer.

On April 27 India made a preliminary ruling that Chinese enterprises cannot be given a market economy status and will impose a tariff from 57.42 per cent to 115.74 per cent to five test enterprises. The enterprises filed a lawsuit against the policy.

On May 19, India made a revision to the ruling, ordering the same tariff for others as that imposed on those who lodged the lawsuit.

On May 18 India launched an investigation into China's textile exports, which will cover the period from April 1 2003 to September 30 2004. One hundred and two Chinese textile enterprises and US$181 million are involved in the case. It is the biggest anti-dumping case against China in the textile industry.