As per latest media report India is likely to withdraw the 12 per cent countervailing duty (CVD) it charges on apparel imports from Bangladesh. Revenue secretary Sumit Bose, recently assured a high-level Bangladesh delegation of positively considering the issue. The joint working group meeting is scheduled for October, 20-22 in Dhaka where Bangladesh will raise the issue again. Bose is likely to head the Indian delegation in the meeting.
Sources reveal India was charging 12 per cent excise duty on its domestic apparel production. In order to ensure a level-playing field for both local products and imports, it imposed the 12 per cent CVD after granting the duty-free access for all but 25 goods from the LDCs. However, in the last budget, India withdrew excise duty on local apparel production, but it did not withdraw the CVD creating an uneven competition for the exports to Indian market, the sources said. <br/
The 12 per cent CVD also reduced competitiveness of Bangladeshi exporters and hindered the level-playing field. As a result it emerged as a barrier to reducing the trade gap between the two countries. Referring to Bangladesh's trade gap with India, sources say even the duty-free access facility could hardly reduce the imbalance. The Bangladeshi delegation told Bose that such discrimination would further widen the gap since export of apparels, Bangladesh's major export item, face the CVD barrier.
Abdus Salam Murshedy, President of the Exporters Association of Bangladesh (EAB), told media that when India granted the duty-free access for almost all LDC goods, it should not create such an obstacle to export of any specific goods.