26-03-2012, 04:38 PM
tariff preference on five tea items
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Annex 8 presents India’s imports of tea from Sri Lanka. Since 1999-00 there has been a marginal improvement in India’s tea imports from Sri Lanka. However the value share has declined not only in relation to India’s bilateral imports, but also in relation to imports from the world. A product-wise analysis shows that India’s imports of black tea (HS 090230) improved in value both in relation to bilateral imports and imports from the world. The imports of tea extracts (HS 210120) and other green tea (HS 090220) also improved in terms of value and value share.
Annex 27 presents Sri Lanka’s exports of tea to India. Of the five items under this category only four items were exported to India in FY 2001-02 and of this only fermented black tea recorded a growth for the same period. India’s export share as a percentage of the total exports for all these items was below 0.5 per cent. Therefore, it is evident that the trade liberalization has not positively affected tea sector.
The Indian official position with respect to the imposition of quotas on India’s imports on garments/tea was that the question of removing or increasing the quota could be considered once this was reached. Currently a very small percentage of the assigned quota had been reached by Sri Lankan exporters.
In respect of a number of sensitive items preferential treatment is accorded with only partial lifting of quantitative restrictions. India will permit the import of Sri Lankan tea to the extent of 15 million kg. per annum at a fixed tariff preference of 50%. Under the initial terms of the Agreement India would permit import of 8 million pieces per annum from Sri Lanka at a fixed tariff preference of 50%. Out of this, 6 million pieces fabric need to be sourced from India. A ceiling of 1.5 million pieces was prescribed for individual categories. In respect of textile items, India's offer is restricted to a maximum of 25%.
1. The Government of the Republic of India and the Government of the Democratic Socialist Republic of Sri Lanka had signed a Free Trade Agreement (FTA) on the 28th of December, 1998, inter-alia, to promote mutually beneficial bilateral trade.
2. Pursuant to the FTA, a meeting between the two sides (India and Sri Lanka) was held on the 2nd of February, 2000, to operationalise the Agreement, wherein, amongst other things, it was decided that Sri Lanka could export into India in any one calendar year 8 million pieces (pcs.) of apparel articles falling under chapters 61 and 62 of the Harmonized System of Nomenclature (HSN), on the payment of preferential import duty. It was also agreed that for the manufacture in Sri Lanka of 6 million pcs. out of these 8 million pcs. of apparel articles, the sourcing of fabrics will be done from India. It was further agreed that not more than 1.5 million pcs. will be of any one product category.
3. The above preferential tariff quota for the calendar year 2000 is capped at a total of 6.67 million pcs, of which a minimum of 5 million pcs. will be manufactured in Sri Lanka out of the fabrics of Indian origin. The other condition to the effect that the quantum of export of such apparel articles by Sri Lanka into India shall not exceed 1.5 million pcs. in respect of a single product category stands.
4. In order to finalize the procedural arrangements for the operationalisation of the Tariff Rate Quota Arrangement in respect of apparels, the Sub-Groups of the delegations of the Government of the Republic of India and the Government of the Democratic Socialistic Republic of Sri Lanka met in New Delhi and held discussions on the 18th and 19th April, 2000. While the Sub-Group from the Indian side was led by Shri Atul Chaturvedi, Joint Secretary (Exports), Ministry of Textiles, Government of India, the Sub-Group from the Sri Lankan side was headed by Shri Roy Jayasinghe, Additional Secretary, Ministry of Industrial Development, Government of Sri Lanka. A list of the participants in these meetings is enclosed as Annexure-A.
5. While in respect of Sri Lanka, the Director (Exports), Textile Division, Ministry of Industrial Development and the Director General of Commerce, Ministry of Internal, International Commerce and Food, have been designated as the authorities for the issue of the quota and the Country of Origin Certificate respectively, for the export of apparel articles from Sri Lanka to India, in the case of India its Textiles Committee has been duly nominated to monitor the tariff rate quota parameters.
6. For the purpose of these arrangements, the term ‘fabric’ shall mean wet processed (involving bleaching/dying/printing/combination thereof/dyed yarn) fabric which can be directly used for garment manufacture.
7. The apparel articles which can be exported by Sri Lanka into India under these arrangements will fall in the product categories covered by chapters 61 and 62 of the HSN. A list of the product description (drawn from the European Union categorisation) is enclosed as Annexure-B. In the event of any dispute regarding the classification of any apparel article(s) in regard to a product category, the decision of the jurisdictional Customs authorities in India will be final.