Textile exporters in India may face difficulties in accessing markets in the European Union after the removal of quotas from January 2005.

EU is setting stiff conditions on the use of chemicals in textile products, restricting preferential duties and introducing new rules of origin to keep a check on the flow of textile imports into its member states.

To begin with, EU is planning stricter labelling requirements. It is also asking its companies to factor in labour and environmental concerns -- an agenda that the 15-member union had failed to push through into the multilateral trading system during talks under the World Trade Organisation.

EU is of the opinion that consumers should be aware of the chemicals that are being used for manufacturing textile products.

Health concerns of the citizens of member states were paramount and textile labelling should provide "clear, accurate and understandable information", a paper prepared by the Commission of the European Communities said.

The paper laid out the different options available to the EU in dealing with imports into member states from countries like India, China and Pakistan from January 2005.

Among the options being considered by the EU, which at present offers access to developing countries at 20 per cent lower tariffs and duty-free access to least developed countries through the generalised system of preferences, is "limiting the preferences".

"In view of the impact of quota elimination, especially on LDCs and small textile and clothing suppliers, the importance of limiting preferences to those countries, which are more vulnerable needs to be taken into account in establishing a new GSP programme after 2006, while respecting the principle of non-discrimination," the 43-page document said.

It has also proposed changes in the rules of origin for countries so that the ones with which EU has preferential access are not used as "platforms for minimal processing of goods coming from non-beneficiary countries".

According to the document, quota removal is likely to be seen as a reduction in prices and companies in the EU should make use of all available trade defence measures like anti-dumping or anti-subsidy action.

Besides, intellectual property rights issues are also proposed to be taken up during dialogues with trading partners.