BRITAIN AND INDIA

Dominion, Volume 28, Issue 92, 12 January 1935, Page 7

BRITAIN AND INDIA

Provisions of New Trade Agreement OTTAWA SUPPLEMENTED (British Official Wireless.) Rugby, January 10. The text of the United KingdomIndia trade agreement, signed yesterday, was 'published this evening. It is supplementary to the main Ottawa Agreement witli India, aud deals in main with the Indian protective duties in regard to which it was not possible at Ottawa to secure any very definite undertakings. It is the result of negotiations which arose directly out of the work of the mission which went to India from Lancashire in 1933 and the scope of the agreement was extended to other industries in the course of negotiations.

The agreement, which remains in force so long as the main Ottawa Agreement continues, does not deal with particular rates of duty, but with general principles. It provides inter alia that the Government of India will continue to apply established principles of “discriminating” protection to Indian industries, the amount accorded being only so much as is required to equate the fair selling price of Indian goods with that of imported goods. So far as is consistent with this principle, the duties on United Kingdom goods will be lower than those on foreign goods, and these margins will not le altered to the detriment of the United Kingdom. In effect the principle of full opportunity of reasonable competition, contained in the Canadian and Australian Ottawa Agreements, is established, but in more precise language. On its part the Government of the United Kingdom recognises that import duties constitute an indispensable element in Indian revenues, and thar, accordingly, revenue considerations must have due weight in fixing the levels of import duties, but the Government of India will undertake that over-riding revenue duties will only be imposed on goods subject to protective duties where this is essential from tne point of view of revenue. The Government of India undertakes that industries in Britain will be given a full opportunity of putting their case before the Indian Tariff Board.

In a separate exchange of letters the Government of India renews its assurance as to the reduction of duty on cotton piece goods as soon as revenue considerations permit the removal of the general revenue surcharge of 5 per cent. The United Kingdom Government for its part gives certain assurances as to the treatment of Indian cotton piece goods in the colonies. The Government of the United Kingdom undertakes to co-operate with commercial interests to develop the import from India of raw or scmi-inanufac tured materials used in the manufacture of articles of the kind to which this agreement applies, witli particular reference to the consumption of Indian raw cotton in Britain, and agree to continue the duty-free entry of Indian pig-iron into the United Kingdom, so long as the duties on iron and steel imported into India from the United Kingdom are not less favourable than those laid down in the recently passed Indian Iron and Steel Protection Act.