Expert sees value in India trade pact

Imports into India increase 50% year on year ALAN PEAT WHILE CHINA continues to be the centre of attention for its booming trade growth, SA’s merchandise trade with India should not be forgotten, according to Dr Ron Sandrey, a senior research fellow at the Southern African Trade Law Centre (tralac). During 2005 imports into India from SA totalled some US$2.65-billion, a figure that increased by 50.1% from 2004, he told FTW. “This represented 1.9% of Indian global imports, a figure that has shown a downward trend over the last seven years. In commodities, imports were dominated by gold (US$1.846-bn), followed by coal (US$171-million) and pentaoxide chemicals (US$149-m). The average duty on these imports was calculated to be 15.88%” On the other hand, Indian exports to SA also increased dramatically over the last year, and by December 2005 they were US$1.102-bn - or 2.0% of SA’s total imports. “Although exactly half of the trade enters duty-free,” said Sandrey, “the average duty that would have been assessed in the absence of any rebates was 11.01%. “These duties are mostly paid by the 30% of the imports that enter where the duties are assessed at 20% or more – a grouping that contains motor vehicles and their parts, and textiles, clothing and footwear.” Sandrey’s further detailed analysis confirmed that SA was doing very well in the Indian market, he told FTW, given its global export mix and India’s global import profile. “This raises the following question,” he added. “Does this profile not suggest that a more active involvement with India – perhaps in the form of the free trade agreement (FTA) – is worth pursuing more vigorously?”