Government has approved the duty structure for Asia Pacific Trade Agreement (APTA)- a preferential trade agreement between six developing countries of Asia including China and Korea.
As a preferential trade arrangement, the APTA gives a low level of trade liberalization. Tariff concession will not be substantial as in the case of usual free trade arrangements. Similarly, the number of tradeable goods under the agreement will also be limited.
The APTA has six members at present – India, China, Bangladesh, Lao PDR, South Korea and Sri Lanka. Mongolia is trying to join the trade bloc.
APTA is an initiative by the UN Economic and Social Commission for Asia and the Pacific for trade promotion through exchange of tariff concessions among developing country members of the Asia Pacific region.
“The Cabinet chaired by Prime Minister Narendra Modi has approved the exchange of tariff concessions, on margin of preference basis, under the fourth round of negotiations under the APTA and related amendments,” an official statement described the Cabinet decision to agree with the APTA’s tariff structure.
“The Cabinet approved India’s offer of 28.01 per cent of dutiable national tariff lines with an average Margin of Preference (MoP) of 33.45 per cent,” – the official note has added about the new tariff lines offered by the country.
The term ” margin of preference ” means the absolute difference between the most-favoured-nation rate of duty and the preferential rate of duty for the same product. As per the cabinet decision, the duty under APTA imports will be 33.45% lower than the WTO’s MFN rate.
Through the Cabinet note, India has also agreed to amend the preamble of APTA to effect accession of Mongolia as the 7th participating state.