Industry, farmers relieved as FTA excludes dairy items, rice
By Sandip Das
The tariff concessions under the India-UK FTA for tea, spices, food items and marine products will help Indian exporters increase market access in the UK . The local industry and farmers are also relieved that several sensitive sectors such as dairy have been kept out of the purview of the deal.
Traders anticipate a rise in imports of lamb, confectionery, and salmon into India, although the exact quantum of additional imports would vary depending on the level of competitiveness of the UK industry, and its pricing power.
Trade sources told FE that keeping in mind the apprehensions expressed by rice processors in UK, a proposal to reduce import duties of 121 pound per tonne on processed (white) rice – this works out to be 12-13% of landed merchandise value at current prices– has not been included in the FTA, while semi-processed (brown) rice will continue to be exported from India without duties.
According to Ajay Bhalotia, managing director, Fortune Rice, which exports rice to only European Union countries and UK, out of India’s annual exports of 0.16 million tonne (MT) to UK only a small portion is white rice. “We (India) ship semi-processed rice to the UK, then local processing is carried out before being it is sold in the market,” Bhalotia said.
Ranjit Singh Jossan, MD, Jossan Grains, a leading exporter of basmati rice in Punjab, said the UK’s concern stemmed from the fear that a zero-duty regime on while rice would open the doors for increased competition from Indian exporters.
Similarly, despite being the largest producer of milk in the world with around 25% share, India’s dairy sector remains protected from duty concessions in all FTAs signed by the country due to its sensitivities involving small farmers.
R S Sodhi, president, Indian Dairy Association, had stated that the dairy sector should not be unnecessarily tinkered with as it is witnessing steady growth over the last few decades. According to him, the sector should not be seen only from a trade perspective as around 100 million farmers are engaged in dairy and allied sectors. “Sensitive items like dairy products, apples, cheese etc excluded from any duty concession by India to protect its farmers,” according to a commerce ministry statement.
Lamb exports from the UK, earlier subjected to 33% import duties, would become tariff-free, boosting their competitiveness in the Indian market. The UK’s independent Trade and Agriculture Commission (TAC) will be commissioned to scrutinise the free trade agreement and produce a report on whether the measures within the FTA are consistent with the maintenance of UK statutory protections in relation to animal and plant health and life; animal welfare; and the environment, according to an official statement.
This article has been republished from The Financial Express.