Govt says can live with FTAs; domestic units want protection from imports
Updated: Jun 05, 2014 02:40:04pm
New Delhi, Jun 5 (KNN) Admitting that some of the Free Trade Agreements allowing unrestricted imports , have resulted in duty inversion, the Commerce Ministry has started conducting “outreach programmes” to inform stakeholders about the benefits of such pacts.
According to a media report quoting an official, the commerce department has conducted outreach programmes on FTAs across the country.
There has been growing concern amongst the Indian MSMEs about the increasing imports of finished goods under free trade agreement.
“Indian industries Association (IIA) has been representing to the Government to protect the interests of MSME Manufacturers who have to compete with cheap imports from outside the country. Last year we took the issue of cheap import of garments from Bangladesh under free trade agreement. As a result, the Government of India reduced the excise duty on garments being manufactured in India,” President of Indian Industries Association, Pramod Miglani told KNN.
“Generally, IIA is advocating for developing and promoting the manufacturing base in India which at present is going through very rough times. Unless it is done, most of the manufacturer MSMEs will switch over to trading from China or other such countries. We have also been asking the government to allow the import of scarce raw materials rather than the finished products,” he added.
Commerce secretary Rajeev Kher earlier said that FTAs are not “evil” and businesses should take advantage of these pacts.
“A picture has been painted as if FTAs are nothing but evil. But we have to recognise that this is not the fact. The important thing is that we have to see how we are utilising these FTAs,” he said.
He added that some FTAs have caused certain problems like duty inversion and would have to be addressed. "Go deeper and see how these FTAs can be considered as institutional opportunities," he said while addressing the CII's Export Summit here.
Duty inversion refers to a situation where the import duty on finished goods is more than that on raw material, disincentivising in the process, the manufacturing in the country which would tend to import more of the finished products. (KNN/SD)
According to a media report quoting an official, the commerce department has conducted outreach programmes on FTAs across the country.
There has been growing concern amongst the Indian MSMEs about the increasing imports of finished goods under free trade agreement.
“Indian industries Association (IIA) has been representing to the Government to protect the interests of MSME Manufacturers who have to compete with cheap imports from outside the country. Last year we took the issue of cheap import of garments from Bangladesh under free trade agreement. As a result, the Government of India reduced the excise duty on garments being manufactured in India,” President of Indian Industries Association, Pramod Miglani told KNN.
“Generally, IIA is advocating for developing and promoting the manufacturing base in India which at present is going through very rough times. Unless it is done, most of the manufacturer MSMEs will switch over to trading from China or other such countries. We have also been asking the government to allow the import of scarce raw materials rather than the finished products,” he added.
Commerce secretary Rajeev Kher earlier said that FTAs are not “evil” and businesses should take advantage of these pacts.
“A picture has been painted as if FTAs are nothing but evil. But we have to recognise that this is not the fact. The important thing is that we have to see how we are utilising these FTAs,” he said.
He added that some FTAs have caused certain problems like duty inversion and would have to be addressed. "Go deeper and see how these FTAs can be considered as institutional opportunities," he said while addressing the CII's Export Summit here.
Duty inversion refers to a situation where the import duty on finished goods is more than that on raw material, disincentivising in the process, the manufacturing in the country which would tend to import more of the finished products. (KNN/SD)
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