Bilateral Trade Balance in Favour of India Under SAFTA .

LAHORE: Bilateral trade balance is in favour of India under South Asian Free Trade Agreement (SAFTA), official documents revealed on Wednesday.

According to the official document of the Federal Board of Revenue, the trade is not only in favour of India, but it also causes revenue loss to the national exchequer under SAFTA trade.

Pakistan’s import volume from India under SAFTA (Agreed Tariff Lines) in fiscal year 2009/10 stood at Rs266.322 million of which Rs20.019 million Customs duty was collected against the statutory Customs duty of Rs30.425 million, causing a revenue loss of Rs10.405, it said.

In fiscal year 2010/11, the revenue loss was increased to Rs17.395 million as the total imports from India under SAFTA stood at Rs421.154 million and Rs27.728 billion Customs duty was collected against the statutory duty of Rs45.124 million, according to the documents.

Similarly, in the first six months of the ongoing fiscal year, the revenue loss to the government reached Rs17.383 million under SAFTA imports from India.

Pakistan had imported items worth Rs384.639 million from India during the first six months of the fiscal year, while Rs24.436 million Customs duty was collected against the statutory duty of Rs41.820 million, it said.

Major import items from India under SAFTA during July 2011 to December 2011 were chloroparaffins liquid worth Rs151.983 million, copra Rs45.992 million, shield whether or not broken Rs36.504 million, heterocyclic compounds Rs29.158 million, aluminum alloys Rs19.365 million, prepared binders for foundry moulds Rs14.272 million and granite worth Rs8.528 million.

The document said that the trade between SAFTA countries is carried out on the “Agreed Tariff Lines”, while no concession is given on the Sensitive List items. There are two categories of countries under SAFTA agreement.

First category is called least developed countries (LDCs), which consist of Afghanistan, Bangladesh, Bhutan, Nepal and Maldives. The LDCs were given preferential treatment and they were allowed trade on Agreed Tariff Lines at maximum rate of five percent since December 31, 2008.

The second category is called non-least developed countries (NLDCs), which consists of India, Pakistan and Sri Lanka. The non-LDCs would be given maximum rate of five percent on “Agreed Tariff Lines” with effect from December 31, 2012, it said.

Pakistan has reduced its Sensitive List under SAFTA by 233 items in January. Presently the Sensitive List consists of 936 tariff lines on six digits.

Under SAFTA, the two countries are required to bring down their maximum tariffs to five percent on “Agreed Tariff Lines” by December 31 and presently trade between the two countries is carried out under SAFTA as for two non-LDCs. Pakistan’s total trade volume with India is also favourable to the latter.

According to FBR figures, Pakistan had imported items worth Rs106.466 billion from India during fiscal year 2009/10 against its total exports to India of only Rs22.199 billion, showing a negative trade imbalance of Rs84.267 billion.

Similarly, in fiscal year 2010/11, the total imports from India reached Rs154.705 billion, while exports grow with negligible margin of only Rs0.705 billion and reached Rs22.904 billion, showing a widened trade imbalance of Rs131.765 billion, it said. In the first six months of the ongoing fiscal year, Pakistan’s total imports from India stood at Rs63.340 billion, while imports touched only Rs12.964 billion, showing a trade difference of Rs50.376 billion.

Top 10 import items from India (all tariff lines) during July 2011 to December 2011 were p-xylene of Rs10.435 billion, oil cake and other solid residues, whether or not ground or in the form of pellets, resulting from the extraction of soyabean oil Rs7.615 billion, tomatoes fresh or chilled Rs5.555 billion, cotton Rs4.078 billion, vessels and other floating structures for breaking up Rs2.173 billion, polypropylene Rs2.058 billion, Tea Rs1.885 billion, viscose rayon Rs1.525 billion, oxylene Rs1.171 billion and polyethylene having a specific gravity of 0.94 or more worth Rs1.023 billion, it said.

Top 10 export items to India during July 2011 to December 2011 were dried (dates, pineapples, etc) Rs3.105 billion, cement Rs1.549 billion, pure terephthalic acid (PTA) Rs0.787 billion, polymers of vinyl chloride Rs0.509 billion, base oil for lubricating oils Rs0.485 billion, measuring per single yarn 714.29 decitex or more (not exceeding 14 metric number per single yarn) Rs0418 billion, disodium carbonate (soda ash) Rs0.409 billion, gypsum Rs0.337 billion, stainless steel Rs0.281 billion and grain spilt worth Rs0.255 billion, it added.

Source : thenews.com.pk