Steel products should be excluded from the ambit of Free
Trade Agreement (FTA) with Japan and Korea as these countries are flooding the Indian
market, taking an advantage of concessional duty rates at the cost of domestic
firms, industry body Assocham said.
Accusing the two nations for deviating from the spirit of FTA, the industry
body said for all ensuing and under discussion FTA proposals, India should not
negotiate any duty concessions for steel products.
“FTA's should be evolved on the spirit of complementing the need and
necessities of partner economies rather than exploitation for self-centric
objectives.”
“Unfortunately, with large surplus floating steel capacity together with
rising production and declining demand, both Japan and South Korea have amply utilized
concessional duty rates under the Comprehensive Economic Partnership Agreement (CEPA) FTA for salvaging part of their surplus thereby flooding exports to
India,” Assocham Secretary General D S Rawat said.
There is a need to exclude steel products under Chapter 72 of International
Trade Centre code from Indo-Korea and Indo-Japan CEPA to ensure
sustainability of domestic steel industry, he added.
In a letter to the Steel Ministry, Assocham also requested it to reinstate
import duty rates as per the normal prevailing import duty rates.
India had signed FTA with Korea in January 2010 and with Japan in August last
year. Under FTA, duties on most of the products, traded between the countries, are either eliminated or reduced sharply. Duties in the related cases come to
zero levels in phases.
While import duty on Korean and Japanese steel products has been reduced to
3.13 % from 5 % in 2010, imports from other geographies attract 7.5 % import duty. India had imported around six million tons of steel in the 2011-12
fiscal.
Assocham also said the government should not negotiate any duty concessions for
steel products with partner economies having surplus steel for all ensuing and
under discussion FTA proposals.
“It is imperative that FTA's should focus on investment into manufacturing
sector along with infrastructure development in India instead of
encouraging import of manufactured goods from partner economies to salvage
their surplus into India,” Rawat added.
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