The Hindu Business Line : Zero tariffs on rubber, cashew not ‘harmful’

New Delhi, Sept. 29 Placing rubber and cashew on a faster tariff elimination track under the proposed Indo-EU Trade and Investment Agreement would not harm domestic industry interests, according to the Commerce Secretary, Mr G.K. Pillai.

The Commerce Secretary said he does not anticipate exports of rubber and cashew from the EU to India even if they were placed under a positive list and with zero tariffs.

Mr Pillai’s remarks on rubber and cashew came on the eve of the visit of a 40-member EU delegation to India for the second round of negotiations towards the Indo-EU Trade and Investment Agreement.

“Some of the items that we want to be in a sensitive list (like rubber and cashew) is not of their (EU) interest. Cashew is not grown in EU at all. Might as well put rubber and cashew in positive list and put some other items where there is more sensitivity in the sensitive list in their place,” Mr Pillai said at a stakeholder consultation workshop on ‘India-EU Trade and Investment Agreement Negotiations’.

The EU delegation would visit New Delhi from October 1-6 and hold negotiations with various ministries. The Indo-EU Trade and Investment Agreement negotiations were launched in Brussels in June. This agreement would be comprehensive and would cover goods, services and investments.

Mr Pillai said that both sides could be in a position to conclude the agreement by end of calendar year 2008. “It does not mean that tariffs would become zero in 2008 itself. By and large, what it means is that tariffs in positive list would be reduced to zero over a period of ten years,” he said.

average tariffs

While bulk of the country’s tariffs stood at 7.5 per cent to 10 per cent, the European Communities (EC) average tariffs stood at 3.5 per cent. Mr Pillai highlighted that tariffs would not be the real issue over a period of time.

“The tariffs in EU are already low. The major issues would be non-tariff issues. It is non-tariff issues that have to be addressed and negotiated as part of the agreement,” he said, adding that industry must bring non-tariff issues to the forefront.

The Commerce Secretary underscored the need to learn to cope with non-tariff barriers.

“We have tough negotiations ahead. We are going to make lot of demands on them. Non-tariff barriers are a game both can play. We have hardly played that so far,” he added.

Mr Pillai said that the primary purpose of the negotiations would be to get as many mutual recognition agreements as possible and ensure that there were no restrictive rules of origin.

He also assured protection to domestic trade and industry in situations where the products coming into India are subsidised.

India’s exports to the EC increased from $18.2 billion in 2004-05 to $23.3 billion in 2005-06, registering a growth of 27.3 per cent.

On the other hand, the country’s imports from the EC increased to $26 billion in 2005-06 from $19.3 billion in 2004-05, recording a growth of 34.7 per cent.

In April-December 2006, India’s exports to the EC stood at $19.2 billion, while imports stood at $20.1 billion.

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