False look at imports from countries with free trade agreements

Mumbai, Ta. 16 September 2020, Wednesday

From September 21, the country's customs department will step up its monitoring of imports of mobile phones, set-top boxes, freezers, ACs, cameras and other electronic products from countries with which India has free trade agreements.

A new provision in this regard was added in the Customs Act in the budget session held in the current year. Rules for the implementation of the provision were issued last month, which will come into effect from September 21, finance ministry sources said.

Free trade agreements have been widely misused to avoid paying customs duties on imports. Local producers have made several representations to the government to prevent abuse of the contract.

Under the FTA, each of the partner countries is expected to receive equal benefits. But in the case of India, imports from partner countries are increasing while exports are not growing as much, leading to a widening trade deficit.

The widening trade deficit is becoming a matter of concern for India. India, which used to have a surplus of trade with Singapore and Vietnam, has now turned upside down for the last three-four years.

India also had a trade surplus of બે 2 billion with Vietnam at the beginning of the FTA in 2010, but now it has a trade deficit of ૩ 3 billion, the sources said. A similar situation is being witnessed with Singapore.

The Customs Department will now be keeping a close watch on this in view of the widespread violation of the Rules of Origin.