Indian government to review free trade agreement with South Korea in order to check cheaper imports.
Ministry of Finance, govt. of India has notified India-Korea Comprehensive Economic Partnership Agreement (Bilateral Safeguard Measures) Rules, 2017 on 04 Aug’17. The rules have come into force on the date of publication in the Official Gazette.
Director General (Safeguard) appointed by central government shall investigate whether increased imports of an originating good to India as a result of reduction or elimination of a customs duty in terms of Trade Agreement, have caused or are threatening to cause serious injury to domestic industry.
Following this, Director General shall submit the findings, provisional or otherwise to the central government as to the serious injury or threat of serious injury to domestic industry caused by imports of an originating period into India as a result of reduction or elimination of customs duty under the Trade Agreement. And then recommend bilateral safeguard measure which if adopted would be adequate to prevent or remedy serious injury.
The Central Government, on the basis of the preliminary findings of the Director General, may –
1. suspend further reduction of any rate of customs duty on the originating good provided for under the Trade Agreement; or
2. increase the rate of customs duty on the originating good to a level not to exceed the lesser of:
3. the Most Favoured Nation applied rate of customs duty on the originating good in effect at the time when the bilateral safeguard measure is taken; and
4. the Most Favoured Nation applied rate of customs duty on the originating good in effect on the day immediately preceding the date of entry into force of the Trade Agreement
The Director General shall, within eight months from the date of initiation of the investigation, or within an extended period not exceeding one year from the date of initiation of the investigation determine whether increased imports have threatened the domestic industry.
Indian government w.e.f 01 Jan’17 reduced customs duty to zero on imports of various products (including steel) imported from South Korea under the India-Korea Comprehensive Economic Partnership Agreement (CEPA).
India imported 1.2 MnT flat steel from South Korea in H1 CY17 – According to customs data maintained with SteelMint, South Korea exported 11.24 MnT finished flat steel (HRC/plates, CRC, electrical steel, galvanised steel and others) during H1 CY17. Out of this India remained the 3rd largest destination after China and Japan. India imported 1.2 MnT (11% share) flat steel from South Korea during H1 CY17.
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