New Delhi: A fortnight after initiating a review of the anti-dumping duty on Indian cotton bed linen, European Union (EU) last week initiated an anti-subsidy investigation to examine if export incentives on it such as the duty entitlement passbook (DEPB) are subsidies or not.

The EU on December 18, initiated anti-subsidy proceedings against imports of cotton type bed line from India for the period October 2001 to September 2002, official sources said here.

EU had on December 4, 2002, initiated an expiry review of the anti-dumping duty on the product.

Both the investigations have been initiated soon after a World Trade Organisation (WTO) compliance panel ruling in November this year stating that the EU had fully complied with the recommendations of a WTO dispute settlement body in March 2001 concerning its anti-dumping measures on imports of cotton bed linen.

The implementation panel rejected all claims made by India against the EU's implementation measures.

Industry sources said that the main objective of EU in initiating an anti-subsidy investigation appeared to be to see if a nexus existed between the schemes such as the DEPB scheme and subsidies, since subsidies are not WTO compatible.

EU has earlier initiated anti-subsidy proceedings against stainless steel and antibiotics, they said adding that EU has already levied anti-subsidy measures on partially texturised yarn (PTY) imported from India.

PTI