A public notice issued by the Directorate General of Foreign Trade (DGFT) says that the items listed can be freely imported from Bangladesh, Nepal, Bhutan, Pakistan, Maldives and Sri Lanka.

However, the notice adds that imports will be subject to certain conditions. According to one of the conditions, goods allowed to be imported should be in new/prime condition and should be accompanied by a certificate of origin issued by the concerned authorities in the respective country.

The notice has virtually opened a Pandora's box as it will allow free import of items which have thus far been on the restricted list. Several of the goods shifted to OGL are not even manufactured in these countries.

The ministry has, in some cases, allowed assembled finished products to be imported.Some of the items included in the list, like marble, are likely to encourage imports of the commodity from places other than the ones specified in the notice in raw form.

Customs sources pointed out that as marble is a consumer item, it was on the restricted list and an import licence was required for importing it. These licences, issued under the advance licence scheme, have not been issued since September, 1996, and command an excessively high premium.

The high premium has not seen any change in the number of consignments, however, with importers making a huge profit even after the payment of the premium. In fact, the item is the most sought after commodity by importers/smugglers and is next only to narcotics, sources said.

With marble now being moved to the new list, Nepal is likely to be the ideal place for imports. Even if Italian marble is imported in the form of raw blocks or slabs by a company based in Nepal, it is expected to find its way into a city like Calcutta.

All one needs is a gangsawand a polishing machine set up close to Nepal's border area. A company can import the raw stocks from Italy through Calcutta. Once the raw stock reaches Nepal, the importer can slice the raw blocks and/or just polish them after cutting them into various marketable tiles.

As the raw stock has been processed in Nepal, the local authorities will not hesitate to declare the finished product of Nepal origin and will also issue a certificate of origin for the same.

This is because all the Saarc nations are signatories to the World Trade Organisation (WTO) which specifies that even repacking and processing are to be treated as manufacturing.

Even the central excise authorities in India treat these two as full-fledged manufacturing processes and assess the duty on the finished goods. The same conditions apply in the case of Saarc nations, including the ones listed in the notice.

This means that the goods can now be imported from Nepal on the payment of a nominal import duty, the peak rate of which is lowerthan the amount Indian importers would have had to cough up if they were to import the item from Italy or Iran on the basis of an import licence, which costs up to Rs 2.5 lakh to Rs 3 lakh for every container.

In case the authorities in Nepal do not permit the release of foreign exchange, the importers can, if well connected, always claim that they are paying for the consignments through non-banking channels in India.

As the Indian currency is acceptable in Nepal, the Indian importers would make the rupee payments to their counterparts in Nepal and in turn the same funds will be used for buying foreign exchange for remitting to the exporter.

This way the Nepal government does not lose a single dollar and still retains something towards local taxation besides generating employment for the locals. At the end of it all the loser will be the Indian exchequer, since the route will encourage largescale havala transactions for import of goods that are in reality not of Nepal origin.

The same is true ofassembled and used cars (also assembled) in these countries. In addition to assembled cars, even car kits are permitted as imports in non-assembled condition. This will open the doors for the import of used diesel cars and engines which are not permitted currently.

Besides, the notice contradicts itself by allowing imports of used car kits while saying that all goods imported under the provisions of this notice shall be in "new/prime condition". Importers willing to import used diesel engines can easily avail of this route.

According to customs sources, one can procure consignments from the western/European countries where the life of a car is short. These cars, which would otherwise be heading for the junk yard, can provide a lot of stocks to the Indian importers who can import these in one of the six countries mentioned above and repack them.

According to the harmonised nomenclature system, a part of the WTO agreement, even repacking is treated as manufacturing and, thus, the repacked used car kitscan be treated in the manufactured category in one of the six countries for which payments can be made easily.

There are several other consumer goods which are also manufactured in India but this route will mainly cater to those who are desirous of imported brands.

The importers of these consumer goods can repack their imports in one of the six countries, have the original packing material smuggled into the country and sell it as original once cleared as imports through one of these countries.