Neha Kaushik

New Delhi , March 19

WITH the Union Budget not having addressed the issue of an inverted duty structure arising out of the free trade agreement (FTA), the Consumer Electronics and Television Manufacturers Association (CETMA) is planning to send a representation to the Government requesting for steps to correct anomalies arising out of the agreement.

The industry has been affected by the growing incidence of imports of electronics from Thailand in recent months, and feels that domestic investment may suffer when duties come down further to 6.25 per cent in September this year.

Under the FTA with Thailand, customs duty on imports from the country will be halved from the existing 12.5 per cent to 6.25 per cent from September. In September 2006, it will become zero. However, there is no scheme for a commensurate reduction in customs duty on key inputs such as glass parts and picture tubes required in the manufacture of consumer electronics. "To remedy the situation the customs duty on inputs should not be higher than the customs duty on finished products," CETMA has said.

A CETMA official point out that there has been a surge in imports of products such as colour televisions ever since September 2004.

Industry data shows that while imports from Thailand to India were at $50 million between September-November 2004, exports to Thailand from India were only about $1,25,000. Top imports from Thailand in the period consisted of colour televisions, auto components and polycarbonates.

A few multinationals, which already have a base in Thailand, have in recent months announced plans to use Thailand as a sourcing base for the Indian market. Industry analysts point out that this trend would only strengthen further unless the anomalies facing the sector are corrected.

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