India slashes customs duties on 4800 items from SAARC

NEW DELHI: India has scrapped import duty and reduced customs tariff on more than 4,800 items from neighbouring least developed countries (LDCs) like Pakistan and Sri Lanka in order to boost trade in South Asia. All countries are members of the South Asia Free Trade Agreement (Safta) which came into force in January 2006.

The import duty has been reduced from 16-40% to zero level on items like meat, fish, milk, dairy products and dry fruits from Bangladesh, Nepal, Bhutan and Maldives. However, the duty rates on these items have been reduced to 12% from 20% on goods imported from Pakistan and Sri Lanka. The new rates have come into effect from January 1.

All pharmaceutical products and drugs can now be imported at 10% duty from LDCs, as against 12.5% earlier. However, tariff on drugs has not been cut in case of Pakistan and Sri Lanka, a Central Board of Excise and Customs notification said. Customs duty on fertiliser, lime and cement items has been cut to 10% in case of LDCs, but it would remain at 12.5% for Pakistan and Sri Lanka. Dairy products, excluding milk powder, and butter oil can also be imported from Bangladesh, Nepal, Bhutan and Maldives at zero duty.

The decision to abolish duty on dairy products from these countries is unlikely to impact the domestic market or benefit these countries as they are not major players in milk market. Pakistan and Sri Lanka, which can export dairy products to India, would have to pay 20% duty on these.