Govt May Start Phasing Out Import Curbs From June
The government is considering to impose very high import tariffs on agricultural products and indicate to the World Trade Organisation (WTO) its intention to phase out all the items on the restricted list from June.
According to officials, India would not get an extension for lifting of quantitative restrictions on imports beyond June.
At the WTOs balance of payments (BoP) committee meeting in January, several Organisation for Economic Cooperation and Development (OECD) countries and the International Monetary Fund (IMF) had said that India was in a position to lift all quantitative restrictions on imports within the next two years. It was pointed out that India was one of the six countries which continued with such restrictions.
Pressure is now on India to remove these.
So far, the commerce ministry was unable to indicate a time-table since the agriculture minister objected to removing restrictions on import of agricultural products.
But, an agriculture ministry committee is also veering round to the view that India can indicate a phase-out time-table and seek to retain very high import tariffs in the agriculture and other sensitive sectors.
The level of tariff being discussed is as high as 300 per cent in certain cases.
The committee is expected to submit its report soon.India will also seek safeguard provisions, including reinvoking Article XVIII B of the World Trade Organisation, which allows the balance of payments cover in case the forex reserves position deteriorates at any point.
The commerce ministry proposes to remove the restrictions in two phases over five years.
In the first phase, items allowed for import under the special import license (SIL) list can be made freely importable and an equal number of restricted items can be moved onto the special import license list.
Also, dual-use items can be made freely importable. In the second phase, the items that remain on the special import license list can be made freely importable. According to the governments calculation, 70 per cent of the items are either freely importable or can be imported under SIL.
The remaining 30 per cent items will have to be removed over the next five years. Of the 30 per cent, 10 per cent of the items will continue to remain under restrictions due to safety, defence and other such strategic reasons.On this basis, roughly 600 tariff lines have to be removed every year. At present, approximatly 2,800 items remain on the restricted list.