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K.R. Srivats

New Delhi, April 30

The Finance Ministry has done away with entry-point restrictions and sourcing conditions of fabrics from India to facilitate apparel articles’ imports from Sri Lanka under the India-Sri Lanka Free Trade Agreement (FTA).

The MoU entered into between the two countries in October 2007 for allowing three million pieces of apparel articles to come into India on a duty-free basis and without any restrictions on entry points and sourcing of fabrics has also now been operationalised by the Finance Ministry.

Prior to the latest Finance Ministry move, apparel articles coming into India under the agreed tariff rate quota (TRQ) regime could avail themselves of concessional tariff only if these were made of Indian fabric and were imported through the designated ports of Nava Sheva (Mumbai), Chennai, Kolkata, Kochi and inland container depots (ICDs) of Tughlakabad and Bangalore.

Although both countries had, in October 2007, signed a MoU for a TRQ on three million apparel pieces, official sources said that the MoU could not be operationalised as the Finance Ministry felt that there was no specific mandate from the Cabinet to allow duty-free imports without entry-point restrictions and sourcing conditions on fabrics.

With the Union Cabinet giving such a mandate in March, the Finance Ministry has now allowed import of three million apparel articles without any fabric sourcing conditions or entry-point restrictions.

The India-Sri Lanka FTA was signed on December 28, 1998, and implemented from March 2000.

Under the FTA, zero duty entry of Sri Lankan goods was allowed since March 2003 except for items in sensitive list/negative list. The balance of trade continues to be in India’s favour, with the country’s exports to Sri Lanka during April-December 2007 at Rs 1,916.13 crore and imports from Sri Lanka in the corresponding period at Rs 330.52 crore.

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