In response to media reports on imposing countervailing duty by India on imports of Bangladeshi garments, the High Commission of India in Dhaka has given a clarification. India has not imposed any new duty on garments the country imports from Bangladesh, the High Commission said. Here is the statement:
With reference to reports appearing in sections of the Bangladeshi media, this is to clarify that no new countervailing duty (CVD) has been imposed in the Indian Union Budget 2013-14 on readymade garment imports into India. The CVD of 12.36 percent, which existed on readymade garment imports in 2012-13, continues without any change.
India has granted duty-free, quota-free access to 46 textile tariff lines of greatest sensitivity to Bangladesh which was notified on September 6, 2011. Subsequently, with effect from November 9, 2011, India granted duty-free, quota-free access to all items except tobacco and alcohol and their products to Saarc LDCs, including Bangladesh.
The above notifications provide ‘national treatment’ to exports from Bangladesh to India. In the present instance, the countervailing duty is a duty which is charged in lieu of excise duty which is payable by Indian manufacturers. Levy of CVD provides a level playing field to imported goods on par with locally manufactured products. The CVD that is already in existence is non-discriminatory and non-country specific.
It is further clarified that in respect of Indian manufacturers of readymade garments, the Indian Union Budget 2013-14 has not withdrawn the excise duty on branded garments but permitted the Indian garment manufacturers to avail of either the ‘optional’ or ‘mandatory’ routes for reckoning of excise duty on branded garments that was available to them since 2004 and prior to Union Budget 2011-2012.
In summary, Bangladesh’s readymade garment exporters continue to enjoy the same benefits as in the previous year, with duty-free, quota-free access for their items to India without imposition of additional countervailing duty over the previous year.
Our reply:
The Daily Star ran a report “Garment exports to India face a major blow” on Sunday. Our news item was based on reports of two influential Indian dailies — the Hindustan Times and The Times of India. The Times of India generated the news item on March 5, quoting Press Trust of India (PTI).
Countervailing duty is placed on imported goods that are being subsidised by the importing government. This helps to even the playing field between the domestic producers and the foreign producers receiving subsidies. Countervailing duty is different from customs duty.