Three-Year Timetable For Free Imports Of Consumer Goods

The immediate reason behind the preparation of such a note is the ensuing balance of payments consultations in Geneva under the World Trade Organisation in October. This will be put up before the cabinet to soften the possible political fallouts and to convince all sections of the United Front government of the necessity and desirability of the move.

The Confederation of Indian Industry has, in a recent communication with the ministry, offered its full support to the opening up of the entire sector. It has suggested that this be done in phases.

A staggered exercise will imply that the goods are moved from the restricted to special import licence list and then from the SIL list to the open general licence list within three years. It has suggested that the peak tariff rate could be made applicable to these items. A small negative list could be maintained for security and other reasons, the association has said.

 

The CII reaction is expected to smoothen the process of removing such controls. The time schedule that the commerce ministry is looking at is a five-year extension over the exim policy to be announced in April 1997. This implies that by the end of 2002 all import restrictions will be phased out, save for a small negative list.

In a recent meeting, top ministry officials had looked at the possibility of setting up a review mechanism to keep track of the imports. Fears have been expressed in certain quarters that opening up the consumer goods sector will lead to a flood of imports and this will, in turn, lead to an adverse impact on the balance of payments.

Last year, India was one year's time to review the current restrictions on balance of payments, particularly with respect to consumer durables, by the WTO.

Further, the International Monetary Fund, which was party to the discussions, stipulated that all restrictions will have to be lifted in two years