KOLKATA: Indian producers of certain capital goods, such as machinery for boilers, gas generators, rolling mills or hydraulic turbines, may go out of production, if these items are put on the sensitive list or zero-customs duty list under the non-agriculture market access (Nama) negotiations under the WTO banner.
The list may become lengthy, if India does not run a proper check on the competitive advantages of Indian capital goods and their trade volumes before preparing the list of sensitive items for inclusion in the Nama talks. So, to avert the disaster, the engineering goods’ trade promotion body, EEPC India, has recently drawn a list where it has identified 67 tariff lines as very sensitive to import duty cuts up to zero per cent under Nama talks, the bulk of which consist of capital goods.
The list has been drafted by EEPC India after a thorough check of the ‘revealed comparative advantages (RCA)’ of 129 tariff lines. “This has been done as negotiations under Nama are expected to cover 129 tariff lines,” said a senior official of the council.
These tariff lines, falling under the ITC HS codes of 8208, 8402-5, 8410-17, 8420-8449, 8543-8468, 8474-81 and within the range of 840681 and 848590, include hand tools, boilers, turbines, etc.
“Out of the 129 tariff lines, 67 tariff lines, comprising mainly industrial machinery, are extremely sensitive to tariff cuts, production of which will go haywire, if items under those tariff lines are brought under the zero customs duty list in Nama negotiations. At the most, the appropriate end-level tariff may be between 3% and 5% for those sensitive items,” recommended EEPC India, while putting across its suggestions to the commerce ministry.
However, 62 tariff lines, covering machine tools, will be able to meet the challenges of duty reduction provided the inverted duty structure for its inputs are removed, the council suggests.
It has further suggested that while dwelling on engineering goods for inclusion in Nama negotiations, India should bargain that implementation of tariff cuts under the sectoral negotiations should not come before 2020. There are seven sectors currently being considered under Nama, which include among others automotive and related parts, bicycles and related parts, chemicals, electronics, electrical products, tools and industrial machinery.
Source : The Economic Times