Lack of proper understanding of free trade agreements has resulted in under utilisation of preferential duty tariffs that exporters can claim under them, a senior official in the Commerce and Industry Ministry said here today.
The data revealed that only 10 to 12 per cent of the entire trade was happening under FTAs, Joint secretary, Ravi Capoor said at an awareness programme organised in the city by the Director General of Foreign Trade jointly with Federation of Indian Export Organisations (FIEO) and EEPC India, here.
"FTAs are least understood. India has signed 16 trade agreements so far out of the 200 trade agreements inked by various countries across the world between 2000 and 2015. Most of the agreements signed by India are with countries in the South East Asian Region," Capoor said.
Stating that India has several product lines which offered zero duty access to the Japanese market and only 21 per cent of it was being utilised by exporters, he said it was largely because they were either not aware of the benefits or try to get them through others.
"Most exporters leave the task of availing (duty free) benefits to customs or clearing house agents," he said.
"While the partnering country to the agreement can avail the preferential tariff agreed by the group (of countries) amongst its members, it is not being utilised either due to lack of awareness or because of the exporter's dependence on the clearing agent," he said.
He admitted that there was a huge gap in data collection on
exports under FTA.
On delay in signing FTA with the European Union, Capoor said it has strength in areas like wine, dairy products and automobiles and was interested in selling these products to India.
"India is becoming a hub for small cars and textiles is another emerging area and tariff will not be an issue 15 years down the line," Capoor said.
India will have to move up into high technology and high value added products to compete in the global market, as the world is moving towards non-tariff barriers, he said.
