India has decided to grant duty-free access to Bangladeshi ceramic and dairy products, and also to remove some specific duties on 204 out of 271 tariff lines in textiles and garments under Safta, the daily Indian Express reported yesterday. In another development, the Indian cabinet yesterday endorsed minor changes in the text of the Saarc multilateral agreement to avoid double taxation and to promote mutual administrative assistance in tax matters to be tabled at the Dhaka Saarc summit. The Indian Express report said India is “planning to accord special concessions to Bangladesh in Safta and Bimstec” trade treaties as part of a commitment to provide it increased market access. The report quoted Indian Petroleum Minister Mani Shankar Aiyar as saying that Indian Commerce Minister Kamal Nath informed him about the intention last month.

Duty-free access to ceramics, dairy products, leather footwear, and marble and plastic products was part of Bangladesh's request to India while negotiating under the South Asian Free Trade Area (Safta). Dhaka also sought abolition of specific duties on garment and textile goods.

New Delhi, the report said, is also considering Bangladesh's request for removing non-tariff barriers like mandatory testing requirements for goods like food, textiles and leather, and labelling requirements for jute bags.

India, as short-term measures, will be assessing the Bangladesh College of Textile Technology and the National Institute for Textile Testing, Research and Development for accreditation, the daily said.

New Delhi hopes these measures will address Dhaka's concerns over the issues it raised as pre-conditions for allowing a natural gas pipeline from Myanmar through its territory to India.

Dhaka insisted on New Delhi allowing electricity import from Bhutan and Nepal through the Indian power grid and trade corridors between Bangladesh and the two Himalayan countries through India, and also reducing trade imbalance between India and Bangladesh as conditions for the proposed tripartite gas pipeline.

India in the past made it clear that it would not accept any bilateral precondition for the pipeline project but could consider trade concessions to Dhaka.

CHANGES TO DRAFT

TAX AGREEMENT

The Indian cabinet yesterday approved some minor changes in the text of the Saarc multilateral agreement on avoiding double taxation and promoting mutual administrative assistance in tax matters. "The amendments in the agreement will be considered and signed at the Saarc meeting in Dhaka," Indian Finance Minister P Chidambaram told reporters after the cabinet meeting.

He said the cabinet earlier had approved in principle the draft agreement in February.

The accord would promote mutual administrative assistance and cooperation in tax matters among Saarc countries and provide tax relief to students and teachers pursuing academic interests.