Turkey has given the green light to annul the anti-circumvention duty on import of Nepali yarn, which the European Country had initiated to impose on the Nepali product alleging that Nepali traders were exporting foreign yarn to the country under domestic brand names.

Earlier, Turkey had been providing duty free access to Nepali yarn. Since last year, the European country had initiated to impose 17 percent duty under the anti-dumping category. Following the hassles on export of one of the country’s main exportable items, a government team visited Turkey to clarify Nepal’s position on the production of yarn in March.

Rajendra Singh, deputy director at Trade and Export Promotion Centre (TEPC), said the new development has come up after a team of Turkish government made onsite visits to Nepali production plants two weeks ago. “However, we are yet to receive official letter from the Turkish government over the issue,” Singh said.

Nepal exports polyester and viscose blend yarn worth around Rs4 billion to Turkey annually. India, Hong Kong, Bangladesh and a number of Southeast Asian countries including Vietnam are the other major importers of Nepali yarn.

According to TEPC, traders are attracted to export the domestic product to Turkey as they fetch higher price for the product there compared to other export destinations. With over 20 yarn manufacturers operating in the country, three of them including Triveni Spinning Mills, Jagadamba Spinning Mills and Reliance Spinning Mills export their products to Turkey.

Singh said that during their visit in Nepal, the Turkish delegates were persuaded that Nepali companies manufacture yarn with more than 50 percent of value addition. The companies that import raw material from countries such as India, Thailand, China and Indonesia use labour intensive method to prepare the finished product.

According to Singh, Turkey could have initiated to restrict Nepali products to safeguard their domestic yarn manufacturers. He added that the Turkish authorities had bad experience with Nepali products as traders had failed to submit Generalised System of Preference.

Citing the hassles that exporters face, the government has recently come up with a new provision to ensure GSP facility. “Under the revised platform, traders can now submit electronic copy on the ‘Statement of Origin’ to the importing countries that offer GSP to claim the facility,” Singh said.

Yarn is one of the major exportable items of Nepal, which comprises of almost 10 percent of the country’s total export earnings. In the last fiscal year, the product’s export soared by 29.4 percent to Rs6.93 billion.