Asean to Review its Trade Pact With India
The members of the trading block have agreed to review the trade pact amid the concern that China is using the treaty to ship goods to India, as it is unable to utilize the 10 years old arrangement completely.
The scope of the review would be finalized at the official level. Post that, New Delhi is particular that some of the anomalies to be eliminated at the earliest. The inability of Indian exporters to get a level-playing field is the most prominent issue amongst all. According to the TOI reports, Indonesia has lowered duties on only 50 percent of the items; while close to 75 percent of its products were getting customs duty benefit in India. The similar issue existed with some of the other Asean members, but, those such as Indonesia are not defined as least developed countries.
The government officials also pointed to other deficiencies, that Thailand and Indonesia are importing only five percent import duty on Japanese automobiles, while, Indian automobiles are slashed about 35 percent import charges. Likewise, against 35 percent import duty on rice for trade among Asean members, Indian rice are applied 50 percent levy.
Additionally, other concern for India in the weak rules of origin meant to check the misuse of treaty benefits by countries that are not part of the agreement. The Asean trade agreement requires a minimum of 35 percent value addition in one of the member countries for a product to get duty benefits in India. Yet, the rules are seen to be lax with government officials listing Chinese set top boxes, copper, and polyester among other products that are misusing the CECA.
Modi’s government has criticized its predecessor and UPA for rushing through with the Asean CECA. The Asean members were earlier linking the final review to the conclusion of the Regional Comprehensive Economic Cooperation agreement.
