India May Refuse To Remove Tariffs On All Sectors Identified

New Delhi, June 26: | Updated: Jun 27 2003, 05:30am hrs
The negotiating group on market access at the World Trade Organisation (WTO) will meet in two weeks time to discuss the chairmans proposal on draft modalities on non-agriculture market access negotiations. India has to be ready with its response by then.

The commerce ministry is holding discussions with various sectors, especially the seven identified by the chairman for sectoral tariff elimination, and is expected to firm up its position soon. The negotiating group meeting will begin on July 9.

While the chairmans note stated that the seven sectors identified for tariff elimination were of export interest to developing and least-developed countries, India is not sure that all the identified sectors in the country were ready for such a move.

Speaking to FE, officials said that the ministry was holding discussions with all the sectors involved to examine the pros and cons of tariff elimination. On the basis of the feed-back received, India would decide its stand on the issue.

The seven sectors identified include electronics & electrical goods, fish & fish products, footwear, leather goods, motor vehicle parts & components, stones, gems & precious metals and textile & clothing.

Some sectors like motor vehicle parts & components had expre-ssed their reservation on the suggestion of tariff elimination while sectors like textile and clothing and fish & fish products seemed open to it, sources said.

While a meeting had already been held with the textile ministry in Mumbai early this week, ministry officials would meet marine product exporters in Kerala on Saturday.

According to the chairmans proposal, tariff eliminating shall be achieved through three phases of equal length. The basis for elimination will be from the bound rates after full implementation of current concessions. For unbound items, elimination would be from the most favoured nation (MFN) applied rates during 2001.

While developed participants would have to eliminate tariffs at the end of the first phase, other members will reduce tariffs to a proposed level of not more than 10 per cent at the end of the first phase, maintain this level during the second phase and achieve elimination of tariffs at the end of the third phase.

The formula of tariff reduction suggested by the chairman is a variation of the Swiss formula. However, to build in less than full reciprocity, the coefficient in the formula is not common for all members. It depends on each members average of base rates.

The formula also has a common factor B with a unique value to be determined by the participants. The higher the value, the lower will be the reduction.