Bharat has initiated a comprehensive review of its trade agreement with the 10-member Association of Southeast Asian Nations (Asean), emphasizing various products where taxes on input items exceed those on finished goods.
This review focuses on addressing many anomalies that have undermined domestic manufacturing. According to the media sources, discrepancies in import duties, rules of origin, and non-tariff barriers will be closely examined.
The Ministry of Commerce and Industry has asked for input from the industry to pinpoint products suffering from an inverted duty structure that puts local manufacturers at a disadvantage.
The ongoing review of the pact, which came into effect in 2010, is considered to conclude next year. An official said, ‘One round of physical negotiations has happened and we have agreed on modalities of the overall review process of the pact’. The official added both sides have different sets of expectations but at the end of it, we want deeper trade.
To boost local manufacturing, Bharat has put in place measures such as production-linked incentive (PLI) schemes, higher import tariffs, and import monitoring, but many trade agreements negotiated earlier are seen as blocks.
Bharat saw its trade deficit with ASEAN surge to $43.6 billion in FY23, a significant increase from $25.8 billion in 2021-22 and $5 billion in 2010-11.
According to the officials, the data is being collated on the inverted duty structure. One round of consultations with the industry has taken place on many issues. An official said, ‘It is an offensive interest of Bharat to correct the anomalies and gauge the challenges on duty, rules of origin and non-tariff issues. How much we will be able to correct, the contours of that will be decided’.
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