Thai-India free-trade deal may exclude gold
By Petchanet Pratruangkrai, The Nation/Asia News NetworkThe Nation/Asia News Network--India is considering withdrawing some products from the Free-Trade Agreement (FTA) with Thailand after facing a huge trade deficit, with gold likely to be excluded from the pact.
February 4, 2014, 8:15 am TWN
Somkiat Triratpan, deputy director-general of the Trade Negotiation Department, said that India had asked Thailand to review the FTA. India suspended an exemption on tariffs for Thai gold from the agreement in February last year.
The Directorate of Revenue Intelligence (DRI) under India's Finance Ministry, which controls import inspections and control of illegal goods, has proposed increasing the power of the tax collection agency to immediately ban any imports automatically if it finds some problems such as the rule of origin.
India has levied a low import tariff on Thai gold of only 1.01 percent, while the normal tariff is 15 percent. India has started to collect the higher tariff on Thai gold since February last year, citing unclear rules of origin. As a result, Thai gold shipped to India was valued at only US$9.37 million in 2013, down sharply from US$123.95 million in 2012. Gold ornaments exported to India also dropped from US$52.73 million in 2012 to only US$1.48 million last year.
Somkiat said Indian people favor Thai gold ornaments because of good quality and beautiful designs. To ensure that Thai gold exports to India do not face any problem, Somkiat urged traders to stringently stick with the rules of origin.