Calcutta, Feb. 23: Inverted duty structures for engineering goods, the need for quality checks prior to exchange of goods and services and staggered tariff alignments are some of the concerns plaguing the engineering sector. These problems need to be addressed so that engineering exports can contribute substantially to the Indo-Asean trade.

Engineering exports account for 20 per cent of India’s total export kitty of $100 billion.

“Despite the geographical proximity, India’s engineering exports are just over 1 per cent of the total Asean engineering imports. Quality checks and a proper duty structure need to be put in place to enable the engineering sector to play a more significant role in Indo-Asean trade,” said Rakesh Shah, chairman of Engineering Export Promotion Council (EEPC), at a seminar on trade relations and emerging opportunities with Asean.

Shah said when trade borders are relaxed, due attention is often not paid to the quality of goods and services exchanged.

As far as the engineering sector is concerned, the casting industry is facing a problem. “The metal scrap which they import from the Southeast Asian countries contain Cobalt 60, an isotope which emits radiation. Even though the radiation is of negligible consequence to human beings, when products made from such scrap are exported to developed markets, they are restrained at ports,” Shah said.

EEPC recommends that when bilateral or regional free trade agreements are being signed, such issues need to be addressed and a mechanism needs to be worked out where joint initiatives can be taken to redress such problems.

It feels tariff alignments by India to Asean levels should also be staggered over a period of time and not done at one go this year. Some of the recent FTAs that India has signed has led to problems in inverted duty structures for Indian engineering and capital goods which EEPC feels should be corrected prior to aligning import duty rates.