India's commerce ministry has refused a European Union offer of increased textile quota.

Although the textiles ministry had considered accepting the offer, it has decided it won't raise the issue with the cabinet due to abolition of quotas in five months' time.

Textile industry experts say that the decision will prevent Rs 22billion (US$478million) worth of exports being made.

The EU had suggested increasing India's 2004 quota by 30 per cent if the country restricted all tariffs to 20 per cent.