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WTO to question import growth

Mamata Singh

World Trade Organisation members are planning to tighten the noose around India, seeking an explanation for the tardy growth in the country’s imports despite the removal of quantitative restrictions from April 2001.

Commerce department officials told Business Standard the issue had been raised by a number of members, including developed countries like the US, Canada and Japan, as well as Brazil, Bangladesh and China.

Despite the removal of quantitative restrictions, there has been no surge of imports into India. Countries have questioned whether this is attributable to the imposition of non-tariff restrictions like sanitary and phyto-sanitary measures and those in the Prevention of Food Adulteration Act.

The government’s response is that these measures and acts have been in existence for a long time and have not been introduced after the removal of the quantitative restrictions. The recent introduction of common standards for 133 items, for instance, was aimed at standardising the product quality and not at discriminating against imports, officials added.

India’s imports declined by 0.08 per cent during the last fiscal, following the removal of quantitative restrictions on the remaining 715 items. The country posted a 1.7 per cent growth during 2000-01 and imports rose 17.2 per cent in 1999-2000, when India removed quantitative restrictions on 894 and 714 tariff lines, respectively.

A delegation led by commerce secretary Dipak Chatterjee will leave for Geneva tonight to answer queries from 15 countries on a range of issues, including tariff barriers, non-tariff barriers, standards, anti-dumping duties and subsidies. India is scheduled to answer the queries at the five-yearly review, which will be held in Geneva during June 19-21.

“We have received queries from around 15 countries. The questions relate to anti-dumping, standards, non-tariff barriers, tariff binding, reduction in tariffs, fiscal deficit and export subsidies,” a senior commerce department official said. Sectoral questions on agriculture and services were also raised, he said.

A number of queries are linked to the removal of quantitative restrictions, and how the government has responded to them.

Questions have been raised on the sharp hike in the number of anti-dumping duties imposed by India.

The government’s stand is that with the removal of the quantitative restrictions, an increasing number of companies have been trying to dump goods and capture the Indian market.

However, liberalisation requires a level playing field for Indian and foreign firms and, therefore, the government has had to impose a larger number of duties to protect the interests of Indian companies.

“The EU, Japan, Canada and Brazil have raised the maximum number of questions on anti-dumping duties,” said officials. India has also been questioned on whether it thinks imposition of anti-dumping duties will increasingly become a problem in trade relations among developing countries and whether trying to solve the problem on the basis of special treatment for developing countries will bring relief to the system.

The EU has raised a number of questions on the procedure for imposition of anti-dumping duties, and has questioned whether the government differentiates the effects of dumping from those of other causes of injury to domestic industry.

Countries have also raised the issue of the considerable gap between the applied and bound rates of tariff, which give the government leeway to increase duties. This introduces a lack of predictability in the trading framework, they have said.

In this context, the government has been asked whether it is feasible to increase the number of bound tariff rates. This issue is, however, part of the negotiation process, and the government will not take a stand on this, say officials.

Questions have also been raised as to how India proposes to decrease its fiscal deficit and reduce tariff peaks, given the fact that Customs duties account for nearly 30 per cent of the net revenue of the government.

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