India to scrap duty on crude oil import from Brunei

Mumbai: As a concession in the Free Trade Agreement with the 10-nation trading bloc ASEAN, India is willing to bind zero duty for crude oil imports only from Brunei, writes the Hindu Business Line.

“We have agreed to phase out duties on crude oil over a period of time for Brunei and not for any other country,” an official said. Though India has unilaterally scrapped duties on import of crude oil, it is not a binding commitment. Brunei's request to scrap duties on crude oil was acceded to since the commodity forms a bulk of its exports, the official said, adding this is not the case with Malaysia. India meets 75% of its crude oil requirements through imports. As an inflation control measure, the Government has scrapped import duty on the commodity. While it retains an option to levy the duty, Brunei will get a different treatment under the FTA even when India decides to restore the import duty. Under the FTA with ASEAN, negotiations for which have been concluded, India will eliminate or substantially reduce duties on 95.65% of the items it trades with the bloc. It would however continue to protect sensitive sectors like textiles and chemicals from the trade agreement. In all, India will keep 489 items out of the tariff cut by putting them in the negative list. Though running late by two years, the formal announcement for conclusion of the talks will be made in Singapore around the month-end by trade ministers from India and other leading ASEAN members. The agreement will finally be signed at the India-ASEAN summit in December in Bangkok, to be attended by the Indian Prime Minister, Manmohan Singh.
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