India can Seek Duty Cuts from China on 200 items

NEW DELHI: Naphtha, bovine leather, shrimps and cotton yarn are among about 200 export items from India for which tariff concessions can be sought from China under the Asia-Pacific Trade Agreement and the Regional Comprehensive Economic Partnership.

China has granted deeper duty cuts to India’s competitors including Peru, Pakistan, Australia, South Korea and ASEAN in free-trade agreements with them, which has displaced some of India’s exports, commerce department officials said.

Other products eligible for potential concessions include frozen, shelled shrimps, broken rice, fresh grapes, zinc, aluminium oxide and hydrocarbons like paraxylene, polyethylene, polypropylene and benzene, according to a commerce department study. “These are the items where we can ask for deeper concessions in the Regional Comprehensive Economic Partnership,” said an official aware of the details.
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APTA (formerly known as the Bangkok Agreement) is the only operational trade pact linking India and China, the two fastest-growing markets. South Korea, Bangladesh, Lao PDR and Sri Lanka are also APTA members. The two countries are separately negotiating the RCEP agreement with 14 others.

India’s exports of naphtha, a major industrial fuel, to China are subject to 6% duty with a 10% margin of preference under APTA. This is the highest duty for any of China’s FTA partners as ASEAN countries pay zero, Australia 2.4% and South Korea 4.8%.

As per the commerce department’s study, India’s exports of major products like frozen shrimp and prawns form a small share in the Chinese market due to the absence of tariff concessions. ASEAN members face 0% tariff in the Chinese market and thereby account for a 6% share in that country’s imports of these products.

“Another glaring example is of aluminium oxide,” the department said in the study. This product is not negotiated in APTA because of which India is subject to an 8% duty, while ASEAN countries face nil tariffs.

This is the reason that ASEAN countries are a major supplier to China and form a 41% share while India’s share is only 8%. Australia doesn’t face any tariffs and has a 39% share in China’s imports. “These along with polyethylene and zinc can be pursued in the fifth round of APTA,” it said.

Source: ET

Image Courtesy:I.T