Sri Lanka asked to notify FTA duty cuts
Business Standard, India
Sri Lanka asked to notify FTA duty cuts
By Monica Gupta / New Delhi
3 August 2006
Even as vanaspati imports from Sri Lanka continue to be a contentious issue, it has now come to light that the island country is yet to notify the second phase of tariff liberalisation under the bilateral free trade agreement (FTA) with India. New Delhi has sought notification of the duty reduction at the earliest.
The matter was discussed at a meeting of the commerce secretaries of the two sides in the Capital this week.
While India has already notified zero duty access to goods from Sri Lanka barring a negative list from March 2005, Sri Lanka was allowed eight years to bring its tariffs on certain items to zero.
The roadmap for its duty cut is 35 per cent by 2003, 70 per cent by 2006 and by 100 per cent by 2008. Though the notification was due in March 2006, the same is yet to be issued.
Senior government officials said Sri Lanka had agreed to a tariff rate quota (TRQ) of 2.5 lakh MT for vanaspati imports, including bakery shortening and margarine. It had also assured New Delhi that it would not give permission for setting up of more vanaspati units.
Sri Lanka had also agreed to consider India’s suggestion for a TRQ of 2,500 MT for pepper imports from the island nation.
The TRQ for pepper will be applicable for pepper imports outside the advance license scheme. Imports carried out under the advance license scheme have a re-export clause.
New Delhi had also proposed a TRQ of 500 MT for desiccated coconut at a concessional duty of 30 per cent. Under a TRQ, imports from another country are usually allowed at a reduced import duty up to a fixed limit in a year.
Regarding the difficulties being faced by the Lankan vanaspati producers on account of the channelising of vanaspati imports by India through NAFED, it was decided at the meeting that a high-level official delegation headed by the Directorate General of Foreign Trade K T Chacko and comprising officials from the department of revenue, food and public distribution would try to evolve a transparent channelise system through Nafed.
