Ogl Expansion Unlikely To Boost Imports Significantly

The total value of imports of the 340 items shifted to the Open General Licence (OGL) list in the recently announced Export-Import policy will aggregate just Rs 100 crore in 1998-99, compared with the annual import level of around Rs 140,000 crore, according to the commerce ministry.

Individually, not even a single item recorded imports worth more than Rs 1 crore in 1997-98, claim ministry sources. In aggregate terms, the value of imports of these 340 items was below Rs 50 crore. Officials said even if imports of these items double this year, it is still not a matter of concern.

 

Ministry sources reiterated that the new Exim policy had been designed keeping the swadeshi angle in mind, notwithstanding reports that the policy has diluted the swadeshi stance of the BJP-led coalition.

The freed items cover a wide range, including seafood and marine foods, several food processing and food items, certain textile items, several consumer goods, including watches, various paper products, camcorders, shaving blades and creams, onions, video CDs, razor blades, jam and jellies, video cameras, several sports goods and plastic emulsion paints.

Ministry sources said the individual import volumes were kept in mind while shortlisting the items to be moved to the OGL list. With the new swadeshi government at the Centre, one of the concerns was to ensure that imports do not shoot up and hurt domestic industry, officials said.

Significantly, the impact of moving items to the OGL list was not analysed in 1997-98, when the government had shifted 540 items. India is committed to phasing out quantitative restrictions on the import of around 1,100 items by April 2000.

The small-scale industry has, however, pleaded that it will be severely hit if the import restrictions are lifted. It has also argued that some of the items on the list are reserved for the small sector.

Meanwhile, the commerce ministry is planning to move another 200-300 items over the next few weeks from the restricted to the special import licence (SIL) list. This is expected to ensure that the premium of around 6-7 per cent on SILs is maintained. However, ministry sources argued that the items moved from the SIL to the OGL list would not hit the SIL premium.

The transition period of freeing imports entails first moving a commodity from the restricted list to the SIL category. Thereafter, it is moved to OGL, wherein a tariff is the only protection available to competing domestic products.