EXCHANGE OF TARIFF CONCESSIONS
BY CHINA AND INDIA UNDER THE BANGKOK AGREEMENT
EXPORT
GAINS FOR INDIA LIKELY IN CHEMICALS, LEATHER, TEXTILES AND DIAMONDS
The
Bangkok Agreement, signed in 1975, refers to an initiative under
the Economic and Social Commission for Asia and the Pacific (ESCAP)
for trade expansion through exchange of tariff concessions among
developing country members of the ESCAP region. This Agreement
was ratified by 5 countries and is operational between 4 countries
viz., Bangladesh, India, Korea and Sri Lanka (Lao PDR has not
yet issued the customs notification). China also offered to
join the Agreement in 1993.
As part of China’s
accession procedure, China has given an offer list of 182 items
(corresponding to 217 tariff lines) to India as per the international
Trade Classification Harmonised System (ITC-HS), covering items
on which they will provide tariff concessions. The concessions
offered include tariff preferences on several products being exported
by India now. These products include chemicals, leather, textiles
and diamonds. In effect, India – after exchange of concessions
with China – will be eligible for concessions on 722 items, which
cover around 25 to 30% of our total exports to China in value
terms.
India, on the
other hand, grants concessions on 106 items corresponding to 188
tariff lines under the Bangkok Agreement to other member countries,
which will also be available to China on its accession to the
Bangkok Agreement. These 188 tariff lines would cover around
2.2% of our imports from China in value terms.
The advantages that
will accrue from China’s accession to the Bangkok Agreement and
exchange of tariff concessions with China are as follows: (a)
China is a major market in the region and will help to substantially
increase our market prospects through the preferential trade regime
of the Bangkok Agreement; (b) India has already signed an MOU
with China in connection with China’s accession with WTO and therefore,
India’s exchange of concessions with China will further strengthen
the bonds of goodwill between the two countries; and (c) China’s
accession is likely to rejuvenate the Bangkok Agreement which
at present has limited membership.
The Cabinet has recently
accorded approval for accepting the offer list by China to India
for tariff concessions and for extending tariff concessions to
China by India, which are already available to other members of
the Bangkok Agreement.
