The Exim policy has paved the way for greater global competition in the food processing sector by transferring several import items from the negative and restricted list to the Open General List (OGL).
Some of the items that have been transferred to the OGL from the restricted list include citrus fruits (prepared or preserved), and other fruits including apricots, cherries, peaches, strawberries, grapes, apples, guava (both frozen and preserved). Significantly, fruit juices including mango and apple and compound preparations for making beverages (non-alcoholic) have also been shifted.
The Exim policy is in consonance with our commitments at the WTO which requires us to phase out quantitative restrictions over a period of time. The WTO basically requires every country to make its imports and exports free, and we are also moving towards that direction. By transferring so many items to the OGL, the government is paving the way for imports to come in freely at the stipulated rates. However, the domestic food processing industry is competitive and most of our products are cheaply priced as compared to imports. Hence, I dont think there is any cause for worry to the domestic industry, they can face up to foreign competition, explained APEDA secretary S Sabharwal.
However, fears have been expressed by various quarters that the lifting of restrictions from 340 import items might lead to dumping of products by foreign companies. Hence , the need to announce an adequate tariff structure.
The Exim Policy needs to be supported by a balanced tariff structure to ensure a level playing field besides discouraging dumping of products by foreign companies. If the import duty is less than the excise duty prevailing on a particular product, then a countervailing duty needs to be imposed so as to equalise the duty burden, reiterated a government official.
For example, if aerated water has an excise duty of 40 per cent, while import duty is 30 per cent, then the anomaly should be corrected with a countervailing duty, he said.
The shifting of various fruits to the OGL would pave the way for foreign companies like Seagram to launch their fruit based products. Seagram can now launch its premium orange juice Tropicana without having to wait for another four years to enable local farmers to produce high quality citrus fruits required for making the juice.
Seagram had earlier applied to the Directorate General of Foreign trade (DGFT) for import of Tropicana to test market the product before kickstarting local production. Such an application would not be required under the new Exim Policy regulations.
Putting diabetic beverages on the OGL would help soft drink multinationals like Coca Cola to launch its Diet Coke besides the entire range of diet soft drinks. However, government sources pointed out that only the lifting of restrictions would not automatically pave the way for the import of diabetic beverages since the specific item has been ruled out under the Indian Food Laws.
