India-EU FTA: EU wants re-manufactured goods to be treated on a par with new items

Import of re-manufactured goods, such as cars and electronic items, is likely to emerge a bone of contention between India and the EU in the on-going Free Trade Agreement talks with Brussels insisting that such items be treated at par with new ones. 

New Delhi, however, has its concerns as the proposal may hit domestic production and could also speed up e-waste generation, said persons tracking the matter.

The source told BusinessLine, “The EU, in its initial proposal for market access for goods, has specified that none of the parties shall accord to remanufactured goods of the other party a treatment that is less favourable than that it accords to equivalent goods in new condition,” the source said.

Certification process

India’s Foreign Trade Policy does not accord the same treatment to import of used or refurbished goods as it does to new items. Imports of re-manufactured items, such as electronic equipment and cars, are subject to various certification and registration processes.

Although the EU proposal adds that re-manufactured goods should meet all applicable technical requirements that apply to equivalent goods in new condition, India is apprehensive that such imports could prove to be cheaper than domestically manufactured products and may also result in India becoming a “dumping ground’’ for old items.

“India, as well as several other developing countries, had successfully opposed a similar proposal (of treating re-manufactured goods the same as new goods) made by developed countries such as Switzerland, Japan and the US at the Doha Round of the WTO negotiations.

The apprehensions of India turning into a dumping ground for old items remain the same,” the source said.

A similar proposal was also floated by Japan and some others in the Regional Comprehensive Economic Partnership (RCEP) negotiations between the ten-member ASEAN, India, China, Japan, Australia, South Korea and New Zealand. India finally exited the negotiations as it was not happy with some of the concessions that it would have to extend to China.

‘No gain for India’

“The Indian industry is apprehensive that allowing imports of re-manufactured goods on the same terms as new items will affect domestic manufacturing. Consumers in developed nations keep changing gadgets. There are apprehensions that they (exporters in the EU) will repackage gadgets, put a new programme and send it to India. As consumers in developed countries have relatively higher incomes, they won’t be interested in buying re-manufactured goods from India. So, the gain would be only one-way and it would also result in higher e-waste for India,” the source added.

India and the EU formally began the first round of negotiations on a bilateral FTA in New Delhi in June this year, aiming for a speedy conclusion of three separate pacts in the areas of goods, geographical indications (GIs) and investment protection.

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