India to remove specific duty on textiles from Pak

Import duties on these items would be lesser as a result of India's decision to replace specific duties on these goods with simple duties.

Specific duty, which is assessed on the basis on some unit of measurement such as quantity (per piece) or weight, usually turns out to be higher and New Delhi has been under pressure from Islamabad for its removal.

The specific duty on imports ranges from Rs25 to Rs125 per piece whereas a simple duty would entail a flat rate of up to 15 per cent. As a result of this move, 300-odd textiles and clothing items from Pakistan would attract simple duty.

The proposal to remove specific duties and replace them with simple duty will be taken up by Prime Minister Manmohan Singh's Trade and Economic Relations Committee next week after Indo-Pak Commerce Secretary level talks from August 9-10. In a move to deepen its trade engagement in South Asia, New Delhi also proposes to replace specific duty with simple duty on textiles and clothing and jute from Bangladesh. The issue had cropped up at the delegation-level talks for the preparation of a negative list for exchange of tariff concessions under the South Asian Preferential Trading Agreement (SAPTA) in Kathmandu in July. Pakistan President Pervez Musharraf had also raised the issue with Indian Prime Minister Manmohan Singh during his visit in April last.

In fact, not just at the bilateral level but also during SAPTA negotiations, both Pakistan and Bangladesh had been demanding replacement of specific duties on textiles, jute, fruits and dry fruits as they felt these proved to be very high, thus hurting their trade interests. According to them, India, which enjoyed trade balance in its favour, should not have a problem in taking the measure. India's exports to Pakistan in 2004-05 stood at 505.44 million US dollar as against its imports at 95.33 million dollar.