Colombo, Sep. 15 : Sri Lanka's garment making industry, which was being promoted by European Union on the pretext of helping 2004 tsunami victims, may suffer a serious setback, as the Union decides to withdraw the trade benefits in order to punish the Government's alleged human rights abuses in the recent civil war.

Known as `garments without guilt', the cheap and good-quality casual clothes, sportswear and lingerie made in Sri Lanka were selling like hot cakes in stores such as Next, Tesco and Marks & Spencer.

Clothes worth billions of pounds have been imported, tax-free, to the European Union for the past four years.

But now EU officials have given a day to Sri Lanka to respond to a human rights report, which stated that the island nation no longer qualifies for GSP Plus, Times Online reports.

"Given how critical the report is, and how Sri Lanka is likely to respond, it will now be very hard to extend it," one EU diplomat said.

If the EU withdraws the GSP (generalised system of preferences) Plus, another 10 percent of cost would be added to such products, forcing many retailers to seek cheaper alternatives.

The decision threatens to destroy the livelihoods of 250,000 garment industry workers employed in hundreds of factories around Colombo.

According to Sri Lankan officers, President Rajapaksa of Sri Lanka formed a committee of four Cabinet ministers on Friday to formulate their response.

"GSP Plus is crucial. Withdrawing it would mean a lot of hardship - a lot of small and medium-sized enterprises going out of businesses," said Kumar Mirchandani, head of the Sri Lanka Apparel Exporters Association, which coined the "garments without guilt" slogan.

The country last year refused to let an EU team investigate alleged abuses so the EU used independent consultants to examine whether Sri Lanka had violated the UN Convention Against Torture.

Sri Lankan officials accused the EU of seeking to punish ordinary garment workers.

The Sri Lankan Government has promised to give 150 million dollars to the garment industry and to boost exports to India, China and other countries that were less critical during the civil war. (ANI)