India-China tussle: Govt seeks stricter checks on Sri Lanka\, Bangladesh\, South Korea\, Asean imports

NEW DELHI: The commerce and industry ministry has sought stricter scrutiny of goods coming from Bangladesh, Sri Lanka, South Korea and the Asean bloc, amid fears of Chinese imports increasingly being routed through these countries. It has pushed for fast tracking amendments to the customs law to tighten the rules to claim concessional benefits under India’s free trade pacts, in line with the changes proposed in the budget this year.

The ministry has requested the finance ministry to introduce stringent provisions related to rules of origin, to empower customs officers for checking the abuse of FTAs.

In the budget, the government had inserted a new chapter in the Customs Act on the administration of rules of origin under trade agreements, giving it the power to suspend and refuse preferential tariff treatment in case of incomplete information or verification and noncompliance, respectively. Moreover, an importer cannot avail of concessional benefits by merely providing a certificate of origin.

These amendments aren't yet notified.

“We will scrutinise imports coming from third countries and not clear suspicious consignments … There is complete sync in the government at top levels that unnecessary imports need to be blocked,” said a senior official. As per the proposed rules, where the preferential rate of duty is suspended, the officer, on the request of the importer, can release the goods if the importer pays a security amount equal to the difference between the duty provisionally assessed and the preferential duty claimed.

The move comes on heels of India imposing 100% physical checks of shipments from China. “The process of notifying the new rules has begun,” said another person in the know.