Industry body Assocham said that companies in Japan and Korea are flooding the Indian market with their steel products and hence these products must be excluded from the ambit of FTA with these nations.
The body alleges that the companies from these two nations are taking advantage of concessional duty rates at the cost of domestic firms.
Therefore, the chamber asked the central government not to negotiate any duty concessions for steel products for all ensuing and under discussion free trade agreement (FTA) proposals.
It accused the two nations for deviating from the spirit of FTA. FTAs should be evolved on the spirit of complementing the need and necessities of partner economies rather than exploitation for self-centric objectives, it remarked.
In January 2010, India entered into FTA with Korea and in August last year it entered into such a pact with Japan. Under FTA, duties on most of the products, traded between the countries, are either eliminated or reduced sharply. Duties in the related cases come to zero levels in phases.
Unfortunately, with large surplus floating steel capacity together with rising production and declining demand, both Japan and South Korea have amply utilised concessional duty rates under the CEPA FTA for salvaging part of their surplus thereby flooding exports to India, Assocham Secretary General DS Rawat said.
In a letter to the Steel Ministry, Assocham also requested it to reinstate import duty rates as per the normal prevailing import duty rates.
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