The Hindu : Business : Statistics conceal more than they reveal

Online edition of India's National Newspaper
Saturday, Oct 02, 2004

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Business

Statistics conceal more than they reveal

By Our Special Correspondent

CHENNAI, OCT. 1. Statistics often conceal more than they reveal. To this category must belong the pronounced increase in Sri Lanka's aggregate exports to India in the past four years, when the bilateral Free Trade Agreement (ISLFTA, entailing concessional and nil duty imports for eligible category of products) has been in force.

According to figures quoted by K. G. Baalakrishnan, Chairman, India-Sri Lanka Joint Business Council (JBC), at its eighth meeting here today, 63 per cent of the value of total preferential exports from Sri Lanka was accounted for by "copper-related products" in 2002 against 10 per cent in 2001.

A background paper on the ISLFTA, prepared by FICCI (Federation of Indian Chambers of Commerce and Industry), says the "surge in copper exports (of Sri Lanka) created a critical circumstances situation", which was resolved through discussion under the consultative mechanisms in place under the FTA".

The same document shows that import of "non-ferrous metals " by India from Sri Lanka totalled $0.17 million in 2000-01, $18.95 million in 2002-03 and $82.04 million in 2003-04.

Considering that Sri Lanka does not have copper mines and is not a major smelting nation, all this has raised suspicion whether the Rules of Origin or minimum value addition norms under the FTA have been circumvented by some exporters in that nation to divert imported copper and copper scrap into India, to evade the normal customs duties levied on the items in India.

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