Lack of quantitative safeguards worry Indian traders

Traders with special passes can import readymade garments and shoes from China through three border points, without paying duty. With this, the total number of items imported via land route has gone up to 20.

The Directorate-General of Foreign Trade (DGFT) has already made changes in the list of items that can be imported and exported duty-free through the land route. As of now, such imports are allowed through three land custom stations, Nathu La (Sikkim), Gunji (Uttarakhand) and Namgiya Shipkila (Himachal Pradesh).

However, three public notices issued in relation to such imports through the three border points do not mention any quantitative safeguards. This has raised apprehensions among traders that cheaper Chinese imports might be dumped into the Indian market, especially in West Bengal, Punjab and Uttar Pradesh, which are close to these points.

The public notice issued on March 5, 2010 said, “In terms of the provision contained in the Foreign Trade Policy, Import/Export of the following commodities by residents of border districts who are issued trade passes, as per the prevailing customary practice will be allowed freely.”

Government officials, however, claimed that the safeguards were there. They referred to a note mentioned on the Web site of the Sikkim Government, which said, “Import Export Code (IEC) is not required for the Border Trade because persons Importing or Exporting Tibet Autonomous Region (TAR) China are authorised to Trade Indian Currency value of Rs 25,000 per day per trader (2006-2007) only.”

The note added that the term ‘Border Trade’ is to be construed as trade that is opened for the people of the border area only for items produced in the local area and of limited value. The Government increased the Indian currency value limit from Rs 25,000 to Rs 1 lakh per day per trader (2007-2008).

Though border trade started more than a decade ago at Namgaya Shipkila and Gunji, it assumed importance after trade resumed from Nathu la on July 6, 2006, 44 years after a border conflict closed down the ancient ‘Silk Route’.

Over 90 per cent of trade between India and China takes place through the sea route, while Nathu la accounts for over 80 per cent of trade by land through three border points.

(This article was published on July 20, 2012)
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