India may turn flexible at WTO sectoral talks.

NEW DELHI: India may agree to a steeper reduction in import duties in certain industrial goods beyond the general levels agreed to under the Doha round of the world trade organisation, or WTO, if it can take the stalled talks forward.

These duty reductions are being debated under the controversial ‘sectoral’ discussions at the WTO and call on countries to make steep reduction in identified industrial goods.

India has been resisting discussions on sectorals saying that participation should be voluntary and not linked to incentives or penalties.

Though India continues to maintain its stand, it may be ready to be more flexible on the issue.

“The sectorals will not go away. They will stay there. If all that I can say is no, it won’t be intelligent (way to negotiate),” commerce secretary Rahul Khullar said at an interaction with the industry organised by Ficci on Tuesday. The commerce department has called for greater inputs from the industry on the products that could be opened up to unhindered competition and the ones that need to be protected.

“We have proved time and again that we can be competitive. We cannot cower in sheer fear that something bad is going to happen (if India participates in the sectorals),” the secretary said adding that such an attitude could drive the industry into inaction which would ultimately spell trouble.

The ongoing Doha round of multilateral trade talks at the WTO seeks to further lower barriers to trade in both agricultural & industrial goods as well as in services.

While it has been roughly decided how much each country would bring down its tariff ceilings in industrial goods, there is disagreement over the nature of the sectoral negotiations.

The concept of sectoral was introduced much after the Doha round was launched in November 2001 and sought to bring down tariffs on select industrial goods like textiles, auto parts, footwear, bicycles and gems & jewellery steeply and may be eventually eliminate them.

The softening in India’s stand could be due to concerted US pressure on India to take on at least some commitments in sectorals.

The secretary pointed out that there were a large number of products such as specialised cheese and fish products, where India did not have big stake, that could be allowed free entry.

“It is not that all auto components or all chemicals need to be protected. Some do and some don’t,” he said.

He said that there was still time for the industry to go through all products line by line and differentiate between those that were sensitive and those that were not. When it is time for negotiations, the person who goes into the negotiating room should know what to say, he added.

The Doha round had hit a road-block in July 2008 due to disagreement over certain key issues in agriculture and industrial goods, and has not picked up steam since then. However, now that the US has appointed a full time ambassador to the WTO in Geneva, the pace of discussions is expected to pick up.

Source : economictimes.indiatimes.com