Indian government to probe rules for safeguard against South Korean imports
The Dollar Business Bureau
The Indian government is planning to bring out a set of procedures to begin investigating the imposition of safeguard duty against imports from South Korea. India and South Korea have signed a Comprehensive Economic Partnership Agreement (CEPA) on January 2010 and a subsequent review in the agreement in 2016, brought forth the reduction/elimination of duties on various products.
The move by the government comes in the wake of a surge of gold imports from South Korea which is worrying the domestic producers. The Indian Revenue department has notified the India-Korea Comprehensive Economic Partnership Agreement (Bilateral Safeguard Measures) Rules, 2017, for laying out the procedures for such safeguard investigations. This is necessary as India needs to have separate rules for probing against FTA countries.
There has been an unusual surge of imports from South Korea and the government is considering measures to curb them.
Due to the FTA between the two countries, imports of gold have seen a major high touching $338.6 million between July and August months alone. The Director General of Safeguards is now looking to investigate upon receiving complaints by a domestic producer. According to a notification given by the Director General of Safeguards, the probe is “to determine the existence of serious injury or threat of serious injury to the domestic industry, caused by the increased imports of an originating good as a result of the reduction or elimination of Customs duty under the trade agreement.” The final findings of the probe will be submitted within 8 – 12 months from the date of investigation.
As reported earlier gold imports from South Korea do not attract customs duty and the 12.5% countervailing duty was subsumed in the GST. Imports now attract only 3% IGST.
Post GST, the Customs department has collected Rs 30,000 crore in the month of July alone from collections from Customs duty and IGST with imports of gold taking up a significant share.