At present state of affairs, Bangladesh manufacturers is preferring Indian billet than Chinese material. The major cause of such shift in interest is SAFTA agreement that attracts zero duty for SAARC nations. Presently, duty on importing billet from SAARC countries is zero. Whereas, it is around USD 90/MT from other nations (including China).
Currently, 150*150 mm MS billet export offers in Indian market are USD 270-275/MT, FoB India, which after including duty and freight charges to Chittagong (Bangladesh) will be estimated at around USD 305-310/MT from Haldia Port. However, current Chinese billet export offers are USD 270/MT, CFR Chittagong, which post adding duty will be assessed at USD 360-365/MT.
In addition to cheaper cost and low transition time, Indian billet quality is superior than Chinese material.
What is SAFTA agreement?
SAFTA is a trade agreement amongst SAARC eight nations viz Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka and Afghanistan. This agreement is done to promote trade and economic growth in South Asia by reducing tariffs for intra-regional exports.
The SAFTA agreement came into force on 1 Jan’06 and is operational following the ratification of the agreement by the seven governments.
SAFTA requires the developing countries in South Asia (India, Pakistan and Sri Lanka) to bring their duties down to 20% in the first phase of the 2-year period till 2007. In the final 5-year phase ending 2012, the 20% duty will be reduced to zero in a series of annual cuts.
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