Phaseout Of Import Restrictions Over 5-7 Years Cleared
The Union cabinet yesterday mandated a flexible time-frame for removal of all import curbs, with the understanding that the phase-out period should be between 5 to 7 years. The contentious issue of import curbs is slated to come up for discussion at the forthcoming balance-of-payments negotiations at Geneva, which will commence on June 30.
An informal committee, consisting of the agriculture, finance, textiles and commerce ministers, will reportedly take a fresh look at the sensitive items on the restricted imports list.
Sources explained that the real issue is not the overall phase-out time-frame, but the sequence in which items will be removed from the list. India proposes to open up import of many sensitive items, including several agricultural and textiles goods, only towards the end of the phase-out schedule.
Sources said agriculture minister Chaturanan Mishra, who had earlier opposed the phasing out of restrictions, has now asked his ministry to meet the challenge arising out of the new situation. Mishra has asked his ministry officials to prepare a blueprint of the likely impact of the phasing out on each crop.
Diplomatic sources said the actual phase-out period whether 5 or 6 years - is not as relevant as the frontloading and backloading of the phase-out schedule. Textiles and agricultural items are of interest to the European Union, Australia and New Zealand, while the US and Japan are keen for consumer goods and electronics to be opened up as early as possible.
The diplomatic sources felt that the number of sensitive items is too high, and added that the overall time period could be opened to debate if India presents a short list of exceptions. The US & EU have been insisting on a phase-out schedule of 2-3 years.
Ministry sources said since most of the developed countries will do away with the quota system for textiles only by 2005 in accordance with the phase-out of the multifibre arrangement there is no reason for India to do so earlier. Indias BoP consultations meeting was suspended till June 30 after the June 10-11 talks in Geneva failed to reach any conclusion over Indias phase-out period.
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An analysis of Indias proposal shows that 74 per cent of the 2,714 tariff line items are to be liberalised in the last two tranches (2000 to 2006). Of the 802 agricultural items, import barriers on 78 per cent will be lifted in the 4th to 9th years (from 2001 to 2006).
Similarly, of the 581 textile items, 86 per cent are scheduled to be moved to the open general license list in the 4-to-9-year period. Of the remaining 1,331 industrial goods, 66 per cent will have licensing removed in the final two tranches of the phase-out plan.