The DRI has asked the customs wing to look carefully at the origin certificates issued for such consignments by Bangladesh trade bodies.
The Directorate of Revenue Intelligence has sounded an alarm over garments being imported through Bangladesh from other countries to take advantage of duty concessions offered under a free-trade pact.
The DRI has asked the customs wing to look carefully at the origin certificates issued for such consignments by Bangladesh trade bodies. “There is concern over growing cheap imports from third countries via Bangladesh,” a government official said, adding that the agency wants to ensure that only Bangladeshi origin imports are brought in.
The move comes after the DRI issued a show-cause notice in early August to Future Enterprises on 83 garment consignments, allegedly imported from third countries and routed via Bangladesh to take advantage of zero import duty. The agency fears that the route could be abused by other importers and wants the customs to remain alert.
Customs will now keep a close watch on garment imports under the South Asian Free Trade Area agreement entering the country via Bangladesh, another government official said.
The South Asian Free Trade Agreement mandates 30% local value addition in least developed countries for import by other nations. Local value addition norms are incorporated in the trade pacts to not just protect the importing partner but also to ensure contribution to the exporting partner’s economy and local job creation through stringent value addition criterion. “Such imports using the FTA route without any value addition don’t just defeat the whole objective of the agreement but also hurt the ‘Make in India’ initiative,” the person said.
The agency has written to the finance ministry to take up the matter of origin certificates issued in Bangladesh without adherence to local value addition norms. This is not the first time that violation of value-addition norms and rules of origin has come to fore. A similar issue had cropped up under the India-Thailand FTA with regard to gold jewellery imports and the India-Asean accord with regard to consumer durables imports.