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Parliamentary Standing Committee on Commerce for FTA renegotiation with Japan, Korea, Asean

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NEW DELHI: The Parliamentary Standing Committee on Commerce on Wednesday suggested renegotiation India’s Free Trade Agreements with ASEAN, Japan and South Korea to ensure reciprocity in steel sector. Until this is carried out, concessional tariffs with these countries should be suspended, it said.

“India’s concession to the ASEAN has been far in excess than concessions granted to India,” it said and suggested periodic compliance assessment to be carried out for Rules of Origin to arrest market access at concessional tariffs for non-FTA countries besides mandatory domestic content labelling requirement across the value chain.

For the electronics sector, it asked the government to provide protection to the domestic industry till the time it is competent enough to compete with global manufacturers.

The panel also recommended that any investment by foreign entity in electronics manufacturing including third party Electronics Manufacturing Services must be attached with a requirement of investment in infrastructure and promise of technology transfer so that domestic production of critical components can be achieved in the long run.

Stating that it is “deeply concerned by the poor industrial performance” of the country, it suggested a cut in GST for all categories of vehicles and auto components to 18% from 28%, introduction of an incentive-based vehicle scrappage scheme, and a single window clearance facility with faster regulatory clearances and incentives such as subsidy on interest rates and cheaper rate on gas/electricity for API parks.

“The Committee recommends that the Department (the Department for Promotion of Industry and Internal Trade) should look into the policy changes brought in by countries such as Vietnam, Taiwan, Thailand, etc that made them more attractive to the companies shifting their bases from China,” the committee said.

The panel said a long-term solution should be worked out in a structured manner to the land issue and suggested that the Centre constitute an Empowered Committee of State Ministers and the concerned Central Ministers to discuss issues regarding land acquisition and build a consensus on land reforms, in consultation with industry and other stakeholders.

“The Empowered Committee should look into issues relating to land acquisition policies, digitisation of land records and simplifying administrative procedures like registration and land use

conversion. Further, the possibility of having a land bank that will be made readily available for developmental projects may be discussed with concerned stakeholders,” the committee said.

The panel, headed by YSRCP leader V Vijayasai Reddy, said the main challenges faced by the country presently included administrative and regulatory hurdles, inadequate and costly credit facility, tedious land acquisition procedure, inadequate infrastructure facilities, high logistics cost and large unorganised manufacturing sector, among others.

Stressing the need to sensitise the states machinery/administration towards the importance of investment and business, the report said countries are competing to attract foreign investors.

It asked the cente to enter into more international trade agreements that are beneficial to the country in order to boost its international trade relations.

The report said the panel is deeply concerned by the huge inflow of imported toys from China and its adverse impact on the domestic industries.

“The Committee is of the opinion that the development and nurturing of domestic industry and the promotion of domestic manufacturing of toys is of utmost importance. The Committee, therefore, recommends that concerted effort should be taken to promote domestic toy manufacturing,” the committee said.



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