Duty can’t be lifted right away: India
KATHMANDU, DEC 24 -
India has expressed inability to immediately waive countervailing duty (CVD) on Nepali exports at the commerce secretary-level Inter-Governmental Committee (IGC) meeting which concluded here Sunday.
The southern neighbour has been charging 6-12 percent CVD on Nepali readymade garments and copper utensils from the last six months. Exporters said that it had hurt their business immensely when the country has a huge trade deficit with India.
A senior official of the Ministry of Commerce and Supplies, who was a member of the Nepali team at the IGC meeting, said that India was positive about reducing the CVD, but it said that it could be done only through the next Indian budget.
Nepali garments had found a good market in India after losing the US market but the CVD has hurt exports, said traders. According to the Trade and Export Promotion Centre, exports of Nepali garments to India plunged to Rs 141.87 million in 2012-13 from Rs 332.82 million in 2011-12.
Meanwhile, garment exporters said that they could live with India imposing “Sen VAT” on Nepali products if the CVD is lifted. India has been imposing the tax on imported branded garments. “We are ready to pay Sen VAT of the Indian government which is lower than the 6-12 percent CVD,” said Udaya Raj Pandey, president of the Garment Association of Nepal. He added that Nepali products would be competitive in the Indian market if India removes the CVD.
Pandey said that the CVD was too high. According to him, the Indian delegation was positive over the issue during talks held with the association. “They have even asked us to provide the documents related to CVD if our demand could be considered,” he added. The IGC meeting held from Dec 21-22 agreed to a number of demands put forward by Nepal. The two sides discussed 28 points under seven agendas mainly related with simplifying trade and transit procedures in the two countries.
Among the major agreements reached at the meeting, India will allow Nepali automobile dealers to import four-wheelers from third countries by driving them through Indian territory. The two sides also agreed on allowing use of the Jogbani-Biratn-agar and Nautanwa-Bhairahawa customs points in addition to the Raxaul-Birgunj point while importing bulk cargo from third countries. India has also agreed to provide 10,000 improved breed cows to Nepal.
Nepal will be allowed to maintain its 5 percent agriculture development fee on Indian farm products and continue customs duty on Indian cement and clinker. Jib Raj Koirala, joint-secretary at Commerce Ministry, said they would soon send a letter of exchange on the issues agreed upon to India to implement the accord.
Source: The Kathmandu Post
