No major increase in imports from Thailand

An analysis by the commerce ministry of the top 10 items of trade under the Free Trade Agreement with Thailand shows that imports from Thailand have not increased substantially.

Also, India's global exports in case of items like gear boxes grew faster than the export of that item to Thailand. Due to this, the percentage share of India's export of gear boxes to Thailand in its global exports has come down.

The FTA with Thailand came into effect on September 1, 2004. In the first year, India offered 50 per cent tariff reduction on 82 items such as fruit, chemicals and machine parts under the early harvest scheme. The duty was cut by 75 per cent from March 1, 2005, and brought down to zero last March.

The analysis examined the trend of import and export of the top 10 items between September 1, 2003 and March 30, 2004 (pre-FTA period) and in the-post FTA period from September 1, 2004, to March 30, 2005, and September 2005 to March 2006.

"With regard to prominent items of import from Thailand (such as colour picture tubes, polycarbonates, articles of iron and steel, aluminium alloys, epoxide resins and lighting equipment under the early harvest scheme), India's global imports have also increased in the corresponding period. India's imports from Thailand as a percentage of its global imports have not changed significantly, except for two items "" colour picture tubes and lighting equipment used in motor vehicles," the study said.

Commerce ministry officials said the increase in the import of these two items was not a matter of concern since both constituted only small volumes.

Import of colour picture tubes had increased from zero in September 2003-March 2004 to $5.06 million during September-March 2004-05 and to $11.92 million during March-September 2005-06.

While the volumes may not be high, the data clearly points out that the percentage share of this item from Thailand in India's global imports has increased from around 7 per cent in 2003-04 to over 21 per cent in September-April 2005-06. Similarly, import of lighting equipment used in motor vehicles increased from $1.39 million in September-April 2004-05 to $4.99 million in September-April 2005-06.

The share of imports of this item from Thailand in terms of India's global imports of the item increased from 11 per cent in September-April 2004-05 to around 33 per cent in September-April 2005-06.

Regarding exports, the analysis reveals that export of the top item to Thailand "" gear boxes "" has increased by 98 per cent, but the country's overall exports has grown even faster at 129 per cent.

Thus the percentage share of exports of gear boxes to Thailand in India's global exports has declined from 41 per cent in September-April 2004-05 to 35 per cent in September-April 2005-06.

The percentage share of India's exports to Thailand in its global exports has also declined in case of aluminium and aluminium oxide.

The Auto Component Manufacturers' Association (ACMA) is of the view that the increase in gear box exports cannot be attributed to the FTA. The increase was due to the export of gear boxes by Toyota, it said. The company had set up an export-oriented unit in India to make gear boxes well before the Indo-Thai FTA was signed.

Hence, this export would have happened even if gear boxes were not included in the Indo-Thai FTA, ACMA said.

The association wants the government to reduce import duties on all raw materials used to manufacture auto components since they attract a duty of 5 to 12.5 per cent.