India Moves to Lessen EU Duty Sting
India’s largest export market, the EU, has withdrawn its preferential import duty scheme for some Indian products including chemicals, minerals, cars and boats from 2014. As the products are now globally competitive, they will attract normal import duties of 6-12 per cent, says India’s Daily Shipping Times. The EU accounts for 16 per cent of India’s total exports.
India and China have been the top beneficiaries of the EU scheme which provides preferential market access to exports from 90 developing and least-developed countries. Other countries to lose out on benefits from the scheme this year include Argentina, Brazil, Cuba, Uruguay, Venezuela, Russia, Kazakhstan and Malaysia.
The Commerce Ministry is considering cash incentives to the affected industries under the country’s existing Market Linked Focus Product Scheme which gives incentives of between two and five per cent.
India’s trade situation is generating concern. The trade deficit dropped from $146 billion to $110 billion during April-December 2013, but Mr M. Rafeeque Ahmed, President of Federation of Indian Export Organisations, said that it is important to achieve double-digit growth in exports. Exporters have had to borrow at high cost due to the global financial crisis, and this has reducing their competitiveness. He stresses the need to address the liquidity problem of exporters on a priority basis to sustain exports.
Meanwhile, Prime Minister Dr. Manmohan Singh is looking to local markets to strengthen India’s export position. He recently welcomed South Korean President Ms. Park Geun-hye for strategic partnership talks in New Delhi.
“President Park and I agreed that sustaining trade growth and expanding economic exchanges are vital for a stronger India-Korea relationship. Korean businesses were in the vanguard of the discovery of India unleashed by our structural reforms in the early 1990s. Today, as a result of further reforms, India offers greater avenues and opportunities for them.”