India Committed To Phaseout Schedule For Import Curbs

Indias offer to lift quantitative restrictions on imports which will be presented in Geneva today favours a removal of curbs on 28 per cent of the restricted items within the next three years. Import curbs on another 46 per cent of the items are proposed to be lifted by the end of six years. The remaining 26 per cent of restricted items will be freed after nine years.

The World Trade Organisa-tions balance-of-payments committee is scheduled to begin two-day discussions on Indias case in Geneva today.

The proposal envisages lifting curbs on most agricultural items, such as milk products and cereals, only after nine years. Sources said a total of 1,600 tariff lines (items) at the six-digit level are due to be freed. This translates to around 4,000-odd tariff lines at the eight-digit level.

 

However, several foreign diplomats posted in Delhi have indicated that such a long phase-out schedule is unacceptable. Sources in Geneva said the International Monetary Fund (IMF) also feels that Indias foreign exchange position is strong enough for the country to reduce its quantitative restrictions phase-out schedule.

However, the Indian government has also now hardened its stand on the issue. The brief from the cabinet specifies this kind of phase-out schedule.

Since this is a matter with political dimensions and not just economic ones, Indian negotiators are not in a position to deviate from this brief, said a PMO official.

The government is concerned that opening up imports completely could lead to a foreign exchange problem for the country.

Besides, sources pointed out that several products which would have to be freed are reserved exclusively for the small-scale sector.

Removing curbs on agricultural items could also threaten the countrys food security and self-sufficiency, explained sources.

The US, EU, Australia, Canada and Japan have asked India to remove all import curbs within three years or face dispute settlement proceedings under the auspices of the WTO. It has been pointed out that India has not faced a flood of imports in items which have been freed so far.