New Delhi: The Union cabinet on Monday approved a higher tariff concession proposal under the fourth round of negotiations of the existing Asia Pacific Trade Agreement (APTA) where China is also a member country.

Formerly known as the Bangkok agreement, APTA is an initiative under the United Nations Economic and Social Commission for Asia and the Pacific (UN ESCAP) for trade expansion through exchange of tariff concessions among developing country that are members of the Asia Pacific Region. Apart from India, APTA has five more members: China, Bangladesh, Laos, South Korea and Sri Lanka.

Since this is a preferential trade agreement, countries commit only for tariff concessions on more items and extend the existing concessions under new rounds of negotiations. However, it does not lead to tariff elimination as committed under other free trade agreements including the ongoing RCEP negotiations.

Under the latest fourth round, negotiations for which started in 2007, the Cabinet approved India’s offer of 3142 items or 28.01% of tradable items with an average margin of preference (MoP) of 33.45%. MoP means the absolute difference between the most-favoured-nation rate of duty and the preferential rate of duty for like products.

Commerce and industry minister Nirmala Sitharaman said the preferential tariff will drop to 7% under the items offered in APTA, except for 220 electronic goods where tariff will be zero as India is a signatory to the Information Technology Agreement under the World Trade Organisation.

Sitharaman said though RCEP is a lot more ambitious, given the circumstances under which trade is happening currently, APTA is a major step forward.

Approval was also given to amend the preamble of APTA to allow the accession of Mongolia as the seventh participating state in the grouping. Other amendments to incorporate the Sectoral Rule of Origin to the Agreement were also approved.

The Fourth Session of the Ministerial Council of APTA, which is scheduled to be held in January, will formally implement all the above decisions.

Till date, three rounds of trade negotiations have taken place. Up to the Third Round, India has offered tariff preferences on 570 tariff lines at an average MoP of 23.9% and an additional 48 tariff lines to least developed member countries at an average MoP of 39.7%. The third round, with respect to all participating states, cumulatively covered concessions on 4,270 products with MOP of 27.2%.

While India has offered concessions in items where government has monopoly such as railway locomotives, nuclear plant, fissile material, nuclear reactor, aircrafts among others China has offered tariff cuts in textiles, chemicals, pharmaceuticals, iron and steel, agriculture and marine products.

The cabinet also approved the signing and ratification of the extradition treaty between India and Afghanistan. The treaty would provide a legal framework for seeking extradition of terrorists, economic offenders and other criminals from and to the Afghanistan.

Besides extradition treaty with Afghanistan, the signing and implementation of Bilateral Technical Arrangement (BTA) between India and Switzerland on the identification and return of Swiss and Indian nationals was also approved by the cabinet.

The BTA essentially aims to formalise the existing procedure for cooperation on the return of irregular migrants between the two countries without introducing any additional obligations.

“It is noteworthy that the estimated number of irregular migrants in Switzerland who are thought to be from India is less than 100. If the BTA with Switzerland is approved as proposed, it would offer an opportunity to use the same as a model template for negotiations on the subject with other EU countries, which have been raising the issue regularly with us," said an official statement.

The cabinet also approved extension of contract between India and the International Seabed Authority for exploration of polymetallic nodules for a further period of five years (2017-22). The earlier contract expires on 24 March 2017.

“By extending the contract, India’s exclusive rights for exploration of Polymetallic Nodules in the allotted Area in the Central Indian Ocean Basin will continue and would open up new opportunities for resources of commercial and strategic value in area beyond national jurisdiction. Further, it would provide strategic importance for India in terms of enhanced presence in Indian Ocean where other international: players are also active," said an official statement.

Close