Import Curbs Phaseout A Matter Of Time: Ramaiah

Commerce minister B B Ramaiah yesterday said objections of the Union cabinet to removal of quantitative restrictions were only clarificatory in nature. No serious objections had been raised by the ministers, he told Business Standard.

Ramaiah said he would answer the clarifications, and that he expected a decision that will allow the country to phase out the restrictions. The question is just one of timing and the schedule for removal of restrictions.

India is due to ease out the quantitative restrictions and its balance of payments consultations are due in June. The country is under pressure from several developed countries including the United States, Japan and Australian besides the European Union to remove import curbs in two years.

A cabinet note prepared by the commerce ministry has sought permission to phase out the restrictions over five to seven years. A longer time-frame is being sought for removing curbs on imports of agriculture goods. At present, as many as 2,500 items remain on the restricted list.

Officials point out that India could face dispute settlement proceedings at the World Trade Organisation if it fails to indicate a comprehensive schedule for removal of quantitative restrictions this June. This will have serious implications, since the country can be asked to give up the balance of payments cover in one go after just eight months, or face retaliatory action.

It is certain that India will not get an extension beyond June, say senior commerce ministry officials. At the last balance of payments committee meeting in January, several member countries of the Overseas Economic Cooperation for Development and the International Monetary Fund had expressed the view that India was in a position to phase out all quantitative restrictions in two years. It was pointed out that India was just one of the six countries continuing with such restrictions. The commerce ministry however was unable to indicate a time table, since the agriculture minister Chaturanan Mishra had raised strong objections to removal of restrictions on import of agricultural products.

Following this a committee was formed by the agriculture minister to study the easing of curbs on agricultural import.

The committee said the restrictions could be eased in some cases in 7 years with high tariffs in sensitive agricultural items. A simultaneous exercise to rework the countrys tariff bindings on certain agricultural items was also undertaken.