India’s External Sector

7/25/2019 Indias External Sector

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Sanitary and Phyto-sanitary (SPS) and Technical Barriers to Trade (TBT) measures: Inresponse to question on Indias SPS and TBT measures, India explained that specifictrade concerns raised against India have been largely addressed. Regulations adopted inthe past have been on the basis of scientific risk analysis.

Export Restrictions: There were some questions on Indias use of export restrictions.India responded that export restrictions have been used on some occasions for purposesof domestic supply management but these have been purely on a temporary basis. Theban on the export of rice and wheat had to be extended in 2009 due to a dislocation inproduction and again in 2010 due to the severest drought in the country in the last fortyyears. However, the export of wheat and non-basmati rice is now completely free. Theexport of basmati rice is and has always been free. Restrictions on cotton exports wereimposed for only a brief period last year. Cotton yarn exports have been madecompletely free. Similarly, cotton is also freely exportable.

Other Issues: There were questions related to customs valuation, tariffs, and other

charges, internal taxation, import licensing, and the use of trade remedies. In response itwas pointed out that India cannot be accused of protectionist intent in its use of traderemedies. If that were the case, then the easy route of increasing the tariffs up to thebound rates could have been used; that has not been done. Anti-dumping measures arelegitimate instruments against unfair trade practices. Investigations are carried out in afair and transparent manner and subjected to strict scrutiny. As a rule India only imposesthe lesser duty and not the full dumping margin as is done by some WTO members. Thisunderscores the fact that trade remedies are not used as a protectionist tool. Despite thefact that many members, with very deep pockets, use subsidies as part of their tradepolicy, India has not imposed a single anti-subsidy measure. As on date, there is onlyone safeguard duty in force. In the wake of the economic crisis, there was a spurt inapplication of safeguard investigations in 2009. A total of 14 applications were receivedbut in nine cases, investigations were either terminated or a decision was taken not toimpose any safeguard duty. Duties were imposed only in five cases and those too havesince been withdrawn. Moreover, India has never taken recourse to quantitativerestrictions as safeguard measures. Import licensing affects only a few restricted itemsprimarily on grounds of protection of human, animal, and plant life and theenvironment. The licensing regime is open and transparent. Licences are granted on anon-discriminatory basis. The relevant regulations are all available in the public domainand the DGFT acts as the nodal agency.


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India’s External Sector

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