| Dairy, veggies, tobacco among items out of India-UAE trade pact | | | AGENCIES
NEW DELHI, Feb 19: Seeking to protect local industry and giving them more time to adjust to the new tariff regime, India has kept several items such as dairy, fruit and vegetables, cereals, tea, coffee, sugar, food preparations and tobacco out of the free trade agreement with United Arab of Emirates (UAE).
Called as negative list in the trade parlance, it also includes plastics, scrap of aluminium and copper, medical devices, TV pictures, automobile and auto components. They will not see tariff reduction with the implementation of Comprehensive Economic Partnership Agreement (CEPA).
Explaining that custom duties are no longer imposed to earn revenue but to protect the economy and certain sensitive sectors, Commerce Secretary B V R Subrahmanyam on Saturday said that India has a negative list as regards the free trade pact with the UAE.
"If you see this agreement we felt that there are some sensitive sectors if we open it wide there could be some damage. So we have kept those sectors in negative list," he said while speaking to media in a virtual meet.
He listed out dairy, fruit and vegetables, cereals, tea, coffee, sugar, food preparations, tobacco, petroleum waxes, coke, die, soap, natural rubber, tyre, footwear, processed marble, toys , plastics, scrap of aluminium and copper, medical devices, TV picture, automobile and auto components as part of the negative list.
"In all those sectors where manufacturing is being scaled up or we are bringing PLI (production-linked incentive) scheme we have kept them out of the ambit of this agreement," he added.
On the question if India would forego revenue due to lowering or elimination of custom duties, Subrahmanyam said that customs are not the medium to earn revenue.
"Customs are meant for contraband and narcotics. Gone are the days when customs used to be a source of generating revenue. If you see the world, the average tariff is in the range of 2-3 per cent in many advanced countries. So, agreements are not signed keeping revenue loss in mind. Even if you see the tariff level in India, it has been coming down gradually over a period of time. This FTA is also a part of that series," the Commerce Secretary said.
He noted that India-UAE trade pact has one of the most stringent rules of origin, value addition norms.
"Generally value addition is in the range of 30-35 per cent, value addition broadly here is 40 per cent across the board barring gold and couple of high-value items. It's largely 40 per cent," he said.
He further said that the India-UAE CEPA has permanent safeguard mechanism. The pact signed on Friday is being considered one of the most comprehensive ones with 881 pages covering goods, services, investment, intellectual property, government procurement and trade remedies among others.
The agreement which is expected to kick in within 60 days would reduce tariff on 90 per cent of Indian exports to the UAE to zero. In another five years it will cover 99 per cent exports and 97 per cent lines.
Similarly, India will give market access to 80 per cent of imports from the UAE once the new agreement is implemented and later on cover more items.
India and the UAE seek to double the bilateral trade to $100 billion in next five years. |
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