India is in favour of reducing tariffs on products such as textiles to 5 per cent in return for a duty-free access for its products in foreign markets.
Senior government officials told Business Standard the matter was discussed at an inter-ministerial group meeting on non-agriculture market access on Wednesday.
| |||||||||||
Members of the IMG also pointed out that the duty harminisation scheme, which dealt mainly with the tariff levels of around 5 per cent, was aimed at pushing the agenda of developed countries and did not stand to benefit developing countries.
Armed with the inputs from the IMG meeting, the commerce ministry will now approach the Cabinet committee on the World Trade Organisation to frame its strategy on the draft modalities circulated by the multilateral body in Geneva.
India has opposed the non-linear formula forwarded by the WTO.
Officials added that duty reduction to a level of around 5 per cent would help Indian textiles products compete with exports from the least developed countries which enjoyed preferences in the developed and developing country markets.
"India faces competition from the least developed and developing countries when it comes to articles like textiles. The move will help them in fighting this competition effectively," said an official.
According to textiles ministry calculations, the step will not even result in significant revenue loss to the exchequer since textiles imports are subjected to lower duty cuts. The move would help the government reduce its expenditure on duty neutralisation schemes, ministry officials added.
They also said India expected the duty withdrawal proposal to work on a request-and-offer approach with the governments seeking duty removal on items of their interest while maintaining tariffs on sensitive sectors.
The officials, however, reiterated that, like in the Uruguay Round of negotiations, the process should be voluntary and not imposed on any WTO member.
The draft modalities circulated by the WTO had earlier proposed duty removal in seven sectors including textiles, gems and precious metals, electrical and electronic goods, marine gods, footwear, automobile parts and leather.
Indian companies had opposed tariff removal in sectors such as automobile components while favouring the proposal for gems and textiles. Even developed countries like Japan had opposed zero duty in some sectors like marine products.
A 15-year tariff removal period had been proposed by the WTO for developing countries while in case of developed countries duties had to be brought down to zero at the beginning of the implementation period itself.
The new draft modalities released in Geneva last week proposed an agreement on the tariff reduction formula before taking up sectoral issues.
India would also seek a more comprehensive proposal on non tariff barriers faced by its exports, officials added.