India creams off N$1.5bn from Nam
Namibia has to date exported goods worth N$114 million to India while importing N$1.5 billion worth of goods from the same country since sealing trade engagement with the rising Asian giant in 2010.
Namibia exports waste and scrap of tinned iron or steel, non-industrial diamonds, not mounted or set granite merely cut into a square or rectangular shape, manganese ores and concentrates to India.
In the period under review, Namibia imported light oils and preparations, medicaments of mixed or unmixed products, vaccines for human medicine, helicopters weighing 2000kg and parts, non-industrial diamonds, semi-milled or wholly-milled rice, cane sugar, instruments and apparatus for medical and surgical science, dumpers for off-highway use and non-portable automatic data-processing (ADP) machines, comprising at least Central Processing Unit (CPUs) and input/output unit the in same housing from India.
The trade balance between the two countries increased from the N$367.4 million recorded in 2013, which proved that the country’s imports with India are increasing.
Meanwhile, the trade balance in the 2010 stood at N$199.7m, in 2011 it stood at N$260.4m and in 2012 it was N$221.7m.
However, Namibia is leading the Southern African Customs’ Union (Sacu) negotiations with India for the Preferential Trade Agreement (PTA).
The discussions, which are ongoing and kicked off in 2011, were expected to conclude late 2013.
The Deputy Permanent Secretary in the Ministry of Industrialisation, Trade and SME Development, Dr. Michael Humavindu confirmed to The Villager this week that the PTA negotiations are still ongoing.
He added that there has been little progress in the negotiations, saying that India has on several occasions proposed that SACU agrees to an average margin of preference of 70%.
“SACU’s consolidated response resulted in 10% average, very below the proposal. The senior officials for Trade and Industry entities agreed that within the spirit of South-South Cooperation, the negotiations should be continued and concluded,” Humavindu stated.
He further said it was agreed that Member States should conduct further national consultations aimed at improving the SACU offer, both in terms of the margins of preferences and tariffs’ coverage.
“Technical experts will meet after the submissions to finalize the consolidated list for consideration by senior officials,” he noted.
Humavindu said the main objective of the SACU and India PTA negotiations is tariff reductions on selected goods, saying SACU and India are in the process of exchanging tariff requests, which will translate into tariff reductions on selected goods, and eventually benefit both parties involved in the negotiations.
“PTAs facilitate both trade-creation and trade diversion, but as for Namibia, there is an expectation that our balance of payments could be boosted if the Preferential Trade Agreement (PTA) between SACU member states and India is finalized,” he stressed.
SACU’s Trade Negotiations’ Coordinator Leonard Phuti echoed Humavindu’s sentiments. He said there has been very little progress made on the negotiations, adding that “the timeframe for conclusions cannot be estimated for now.”
There were concerns over India wanting preferential access to sensitive areas in SACU, such as the clothing industry, which has been annihilated in Southern Africa due to cheaper imports from China.
There has also been lots of opposition from SACU due to concerns about increased imports from India.
India is a fairly vital trading partner for SACU, as 3.8% of total SACU exports in 2012 were from there, with 96% of these exports originating from South Africa.
India accounted for only 1.1% of Botswana’s exports in 2012, and only 0.2% of Namibia’s in the same year.
Most of SACU’s exports to India are raw, primary or semi-processed commodities.
SACU’s imports from India are to some extent more diversified with petroleum, motor- vehicles, pharmaceuticals, electrical telephony appliances and rice being the ones.
Imports from India accounted for 4.1% of total SACU imports in 2012, and again, South Africa accounted for 96% of these imports.
Imports from India to Namibia were at 0.5%.