'Steel should be excluded from FTA ambit with Japan, Korea'
Steel products should be excluded from the ambit of FTA with Japan and Korea as these countries are flooding the Indian market, taking advantage of concessional duty rates at the cost of domestic firms, industry body Assocham said on Thursday.
New Delhi: Steel products should be excluded from the ambit of FTA with Japan and Korea as these countries are flooding the Indian market, taking advantage of concessional duty rates at the cost of domestic firms, industry body Assocham said on Thursday.
Accusing the two nations for deviating from the spirit of FTA, the industry body said for all ensuing and under discussion FTA proposals, India should not negotiate any duty concessions for steel products.
"FTAs should be evolved on the spirit of complementing the need and necessities of partner economies rather than exploitation for self-centric objectives."
"Unfortunately, with large surplus floating steel capacity together with rising production and declining demand, both Japan and South Korea have amply utilised concessional duty rates under the CEPA FTA for salvaging part of their surplus thereby flooding exports to India," Assocham Secretary General D S Rawat said.
There is a need to exclude steel products under Chapter 72 of International Trade Centre (ITC) code from Indo-Korea and Indo-Japan Comprehensive Economic Partnership Agreement (CEPA) to ensure sustainability of domestic steel industry, he added.
In a letter to the Steel Ministry, Assocham also requested it to reinstate import duty rates as per the normal prevailing import duty rates.
India had signed FTA with Korea in January 2010 and with Japan in August last year. Under FTA, duties on most of the products, traded between the countries, are either eliminated or reduced sharply. Duties in the related cases come to zero levels in phases.
While import duty on Korean and Japanese steel products has been reduced to 3.13 percent from five per cent in 2010, imports from other geographies attract 7.5 percent import duty. India had imported around six million tonnes of steel in the 2011-12 fiscal.
Assocham also said the government should not negotiate any duty concessions for steel products with partner economies having surplus steel for all ensuing and under discussion FTA proposals.
"It is imperative that FTAs should focus on investment into manufacturing sector along with infrastructure development in India instead of encouraging import of manufactured goods from partner economies to salvage their surplus into India," Rawat said.