The Indian industry is not yet fully prepared for the complete elimination of tariffs in the World Trade Organisation identified seven key sectors, including textiles and auto components, the PHD Chamber of Commerce and Industry has said.
"This is because of a number of anomalies in the system, which prevents the industry from having a level playing field," it said in a statement on Tuesday.
In response to the WTO proposals for elimination of tariffs in seven identified sectors, PHDCCI said the Indian industry was not yet prepared for a complete wipe out of tariffs in many of these sectors.
The listed sectors attracting zero-duties are electronics and electrical goods, fish and fish products, footwear and leather goods, motor vehicle and components, stones, gems and precious metal, textiles and clothing.
The PHDCCI said it was not practical to selectively eliminate tariffs only on the listed sectors as many of the inputs used in the production process might not come under the purview of these sectors, and added that this was the reason that many of these sectors might not attract the proposed zero duty norms.
An inverted duty structure encourages the import of finished products, it said, adding, "This also acts as a disincentive for inflow of fresh investments, new technologies, new inputs and local manufacturing, besides crippling the existing industry".
"The inverted duty structure will further accentuate once import tariffs on the seven sectors are eliminated," it added.
