MARKET DEVELOPMENT
Competitive Indian Products: Inclusion of Oil, Ghee in Negative List Necessary
Competitive Indian Products: Inclusion of Oil, Ghee in Negative List Necessary
31/01/14 (Business Recorder) - A comparison of customs duty structure, on the import of palm oil, between Pakistan and India revealed that inclusion of edible oil, vegetable ghee/cooking oil in Negative List is necessary to compete with low-duty Indian products in the region. Experts told Business Recorder here on Thursday that the Indian industry has negligible duty structure advantage on edible oil as compared to Pakistani taxation structure.
The inclusion of edible oil, vegetable ghee/cooking oil in Negative List with India should cover Pakistan Customs Tariff (PCT) Code of items covering headings 1507.1000, 1511.1000, 1511.9020 and 1511.9030. Large-scale subsidies given by India to its agriculture and manufacturing sectors has to be addressed by imposing anti-dumping and countervailing duties on imports from India or similar/identical subsidies be granted to local sectors to compete with them.
They said the dominant presence of Indian origin ghee in Afghanistan revealed the effectiveness of subsidy given by India to the sector. The lesser/nil custom duty on imports of palm oil and competitive tax structure on Indian locally produced edible oil (when compared to Pakistan) are promoting the exports of the product. It is evident that under same duty/tax regime, after granting MFN status Pakistan will become dependent on India to fulfil its national consumption of this food item. Moreover, India and China being the largest importers of edible oil in the world, while making purchases enjoys concessional prices and cheaper freight rates as well. The international market prices are also disturbed at any given point of time besides many other factors when these two giants make purchases to build up their stocks.
They pointed out that in the international edible oil import arena Pakistan occupies 3rd to 4th slot. Since the exports of Ghee to Afghanistan & Central Asian Republics (CARs) are not materialised (marginal) due to in-house tariff & technical barriers, importers-cum-manufacturers-cum-exporters are handicapped and cannot compete with India in price negotiation. Furthermore, comparison of duty in Pakistan & India further retards the scope.
The technical & tariff barriers restricts Pakistani importers to build stocks for compulsory 90 days. For instance latch of ware-housing surcharge (0.75%) effective after 30 days from date of in-bonding forces importers to reduce their imports and keep it in line with 15-20 days consumption. Though national exchequer receives no benefit from this latch. India can easily bag the advantages of international market price fluctuation, which is obvious after the closure or retarding of local industry and edible oil imports in Pakistan.
The inclusion of edible oil, vegetable ghee/cooking oil in Negative List with India should cover Pakistan Customs Tariff (PCT) Code of items covering headings 1507.1000, 1511.1000, 1511.9020 and 1511.9030. Large-scale subsidies given by India to its agriculture and manufacturing sectors has to be addressed by imposing anti-dumping and countervailing duties on imports from India or similar/identical subsidies be granted to local sectors to compete with them.
They said the dominant presence of Indian origin ghee in Afghanistan revealed the effectiveness of subsidy given by India to the sector. The lesser/nil custom duty on imports of palm oil and competitive tax structure on Indian locally produced edible oil (when compared to Pakistan) are promoting the exports of the product. It is evident that under same duty/tax regime, after granting MFN status Pakistan will become dependent on India to fulfil its national consumption of this food item. Moreover, India and China being the largest importers of edible oil in the world, while making purchases enjoys concessional prices and cheaper freight rates as well. The international market prices are also disturbed at any given point of time besides many other factors when these two giants make purchases to build up their stocks.
They pointed out that in the international edible oil import arena Pakistan occupies 3rd to 4th slot. Since the exports of Ghee to Afghanistan & Central Asian Republics (CARs) are not materialised (marginal) due to in-house tariff & technical barriers, importers-cum-manufacturers-cum-exporters are handicapped and cannot compete with India in price negotiation. Furthermore, comparison of duty in Pakistan & India further retards the scope.
The technical & tariff barriers restricts Pakistani importers to build stocks for compulsory 90 days. For instance latch of ware-housing surcharge (0.75%) effective after 30 days from date of in-bonding forces importers to reduce their imports and keep it in line with 15-20 days consumption. Though national exchequer receives no benefit from this latch. India can easily bag the advantages of international market price fluctuation, which is obvious after the closure or retarding of local industry and edible oil imports in Pakistan.