THE commerce department is on a drive to identify 520 items that would be shielded from tariff cuts planned through the proposed India-EU bilateral trade and investment agreement. Tariffs on all other items will have to be reduced to zero in 10 years from the date of implementation of the agreement.
Speaking to ET, sources said as per the mandate of the agreement, India can protect just 520 lines from tariff cuts out of more than 5,000 product lines covered under the agreement. The import value of the protected products cannot be more than $2.6 billion. “Whatever protection is extended to our industry and agriculture has to fall within this range,” an official said.
Unlike India’s sensitive list with the Asean countries (of about 490 items), which includes as many farm products as industrial products, the sensitive list with the EU is likely to have lesser number of agricultural goods. Since EU is not perceived as a threat for many of India’s sensitive agro products like rubber, there would be more scope to protect a larger number of industrial products.
Officials said since the number of items which could be included in the protected goods list is limited, one has to exercise discretion. Although agriculture is a sensitive area, there are a large number of commodities which are not produced in the EU and, therefore, doesn’t pose a threat. “While rubber is a sensitive item and has to be protected against competition from Asean countries, there is no apparent threat from the EU countries. It might not affect the industry if it is excluded from the sensitive list. We, therefore, want the industry to work closely with the government to help identify the potential threats and opportunities,” the official said.
According to Ficci senior director Manab Majumdar, who has conducted workshops in some parts of the country to get inputs from various sectors, industries like automobiles, both completely-built units (CBU) and components, plastic items and equipment & machinery were most concerned about tariff cuts. “We have suggested that the sectors should be included in the sensitive list,” he said.
Unctad is the nodal agency helping the commerce department in finalising the list of sensitive items by holding consultations with stakeholders.
Officials from the EU and India are engaged in a meeting to take ahead the bilateral trade and investment agreement. Negotiations on the agreement envisaging liberalisation of trade in goods, investment and services, began in June this year. The two sides are hopeful of concluding talks by 2008 end following which implementation of the agreement would begin.