Economy

Duty concessions to APTA members get approval

Our Bureau New Delhi | Updated on January 16, 2018 Published on September 12, 2016

Minister of Commerce and Industry Nirmala Sitharaman

Hopes to gain preferential access in steel, iron ore, textiles

India’s decision to offer duty concessions on about a fourth of its traded products to the members of the Asia Pacific Trade Agreement — China, Bangladesh, Lao, South Korea and Sri Lanka — has been approved by the Union Cabinet on Monday.

The new round of concessions, which is likely to be ratified by all members in the APTA Ministerial meeting in January next year, will lead to preferential access for items from India such as steel, iron ore, textile, chemicals and heavy industry products in the markets of members including China and South Korea, Commerce and Industry Minister Nirmala Sitharaman told reporters at a press conference.

New Delhi, on the other hand, will reduce duties on about 3,142 items which include railway locomotives, rolling stock, nuclear reactors, missile material, low-end raw materials, aircraft and spacecraft.

“We are not offering zero duty on any items except on the IT products where the country has already committed to zero tariff under ITA-1 pact (of the WTO). Our tariffs would be lowered to at most 7 per cent,” Sitharaman said.

As per Cabinet’s approval, India can offer concessions on 28.01 per cent of dutiable national tariff lines (about 3,142 items) with an average margin of preference of 33.45 per cent in the on-going fourth round.

Margin of preference

Margin of preference (MoP) refers to the percentage by which import tariffs imposed on products from partner countries in a trade pact is lower than the tariffs imposed on other countries that are not part of the agreement.

Approval was also given to amend the preamble of APTA to allow accession of Mongolia as the seventh APTA member, the release added.

APTA vs RCEP

Responding to questions on the relevance of APTA once the Regional Comprehensive Economic Partnership (RCEP) was signed, the Minister said that the latter was a more ambitious agreement that involved a gradual tariff elimination.

“It would take time for the commitments under the RCEP to be implemented whereas the APTA commitments can be implemented without time lag,” Sitharaman said.

APTA (formerly the Bangkok Agreement) is an initiative under the United Nations Economic and Social Commission for Asia and the Pacific for trade expansion through exchange of tariff concessions among developing country members of the Asia Pacific Region.

Up to the third round, India has offered tariff preferences on 570 tariff lines at an average MoP of 23.9 per cent and an additional 48 tariff lines to least developed country (LDC) members at an average MoP of 39.7 per cent.

The third round, with respect to all participating countries, cumulatively covered concessions on 4,270 products with MoP of 27.2 per cent.

Published on September 12, 2016
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