Indian steel and aluminium producers have asked the Commerce Ministry to exclude the two items from tariff reduction commitments in the on-going Regional Comprehensive Economic Partnership (RCEP) negotiations. Senior officials from the 16 member- countries are to meet in Bangkok this week to give shape to the proposed pact.
“Senior officials from all 16 countries will get together at the inter-sessional meeting this week and there will be pressure to keep the sensitive list of items, on which no reduction commitments will be taken, very short. Both steel and aluminium producers have petitioned to the government to keep several of their items out of the reduction commitments,” a government official said.
Aluminium producers demanded exclusion from tariff reduction list on the ground that this would lead to flooding of Chinese aluminium to the country affecting their business. Since last year they were talking about the fallout of tariff reduction on aluminium in the negotiation process of RCEP pact. A representative from Aluminium Association of India said that they demand the rules of origin to be stringent as far as aluminium import is concerned. AAI said India imports 60 percent of its aluminium requirement, despite having enough domestic capacity.
The Association pointed out how government subsidies and incentives in China bring down cost of production enabling producers to offer highly competitive prices.
RCEP members together, account for 35 per cent of total aluminium imports into India, which increased 17 per cent from 591,000 tonnes in 2016-17 to 690,000 tonnes in 2017-18. If the RCEP is finalised, it will lead to the formation of the largest free trade bloc in the world accounting for 25 per cent of global GDP and 30 per cent of world trade.