‘Indian non-tariff barriers hindering exports’

LAHORE: Besides the engineered tariff on Pakistani products, the Non-tariff Barriers (NTBs) by India are creating hindrance in exports from Pakistan, businessmen said on Monday.
“These NTBs have not been eased during the trade talks held in the past one decade,” they said, adding that the valuation by the customs official is such that they invariably reject the transactional value declared on invoice and increase it substantially. The businessmen complained that the arbitrarily reclassification of the HS code under which the product could be released is a norm and delay in clearance and non-transparency a routine.
The businessmen blamed the Bureau of India (BIS) standards for being the greatest hinderer.
India has around 19,000 standards for various products out of which only a little over 80 percent are equivalent to international standards. The irony is that there is no data available on the enforcement of those standards. “The ISO standards are accepted in India but in case of Pakistan the custom officials use discretionary powers to discourage imports,” they added.
The Indian importers applying for import license to import from Pakistan face unusual delays not experienced in import from other countries. However, this policy is not consistent for leather used by Indian export oriented industry and for that the permission is granted without delay, but for value added products to be consumed in India, the licenses are difficult to obtain.
Indian banks do not honour letter of credits opened by Pakistani banks beyond $10,000. This forces the exporter to release shipment in several parts, which increases the overhead and transport cost. Moreover, there is no direct courier service between Pakistan and India.
Progressive farmer Hamid Malhi said agricultural sector is heavily subsidized in India, making Pakistan agricultural produce uncompetitive.
“India provides around $32 billion as agricultural subsidies,” he said. Irrigation water, electricity, diesel are heavily subsidized for farmers. Moreover, all agricultural products require import license, SPS certificate and import permission from Plant Quarantine Authorities (PQA).
Another barrier is that all food products are tested by Port Health Authority (PHA), Malhi said, adding that most of the time officials are absent and samples have to be sent to other labs causing delays.
“Most of all, the results of lab authorities cannot be challenged,” he said, adding that the certificates from Pakistani labs are not accepted, but other international labs are accepted only. Another textile exporter said it is ironic that only low value added textile products are granted access to the Indian market. “Importers are required to submit shipment samples in government laboratories that ensure that hazardous dyes are not present in the product, as specifications and standards certified by company labs are unacceptable.”
Even certificates of international standards and other international certifications such as SJS are unacceptable. He said only Pakistan Standard Institute certificate is required from a textile testing lab accredited by the National Accreditation Agency of Pakistan. “This facility is not present in Pakistan,” he added.
Therefore, all Pakistani samples are tested and certificates for these are granted by Indian agencies. More than 25 percent of the samples are drawn for test and the validity of the test is six months only. Further, the sampling itself takes around three months and the fee for that is very high. The procedures for collecting samples are also cumbersome.
“All this has impeded export of high quality Pakistani apparel to India,” he explained.
The export orders of small quantities also become unfeasible to execute. Indian restrictions are so stiff that even automatically generated invoices by manufacturers are unacceptable and have to be reformatted.
Leather sector player Shiekh Muhammad Arshad said there is a demand for Pakistani leather in the Indian footwear industry. This is the reason that the NTBs on leather are few and Indian value added export industries get the import licenses for leather without any hitch. However, the leather footwear in India is on the negative list, he said. “Other finished leather made products are subjected to extensive sampling,” Arshad said, “Usually the packaging, so vital for finished leather products, is badly damaged during inspection of goods and sampling procedures.”
The cement sector players also pointed out delays in inspection of factories by Indian quality inspectors. They said the quality licenses are granted for one year and procedure of granting the license takes up to six months.