Non-tar­iff bar­ri­ers likely on 350 items

Move is in line with govt’s ‘At­manirb­har Bharat’ ob­jec­tive

Business Standard - - FRONT PAGE - DILASHA SETH & SUBHAYAN CHAKRABORT­Y

The gov­ern­ment is con­sid­er­ing im­port re­stric­tions on more than 350 items, in­clud­ing elec­tronic goods, toys, fur­ni­ture, and tex­tiles, by putting in place non-tar­iff bar­ri­ers to sup­port do­mes­tic in­dus­try. Steps such as in­tro­duc­ing an im­port-mon­i­tor­ing sys­tem for some and manda­tory li­cens­ing re­quire­ments for oth­ers are be­ing ex­am­ined.

The move is in line with the “At­manirb­har Bharat” ob­jec­tive, to cut im­port de­pen­dence, and en­cour­age pro­duc­tion and de­mand for lo­cally made goods. De­part­ments and min­istries in­clud­ing fi­nance; com­merce; mi­cro, small, and medium en­ter­prises (MSMES); and the NITI Aayog are work­ing on a strat­egy to cur­tail such im­ports.

Be­sides, es­tab­lish­ing rig­or­ous prod­uct stan­dards is be­ing worked out by the Bureau of In­dian Stan­dards (BIS).

Such im­ports are worth $127 bil­lion. These come largely from China.

Bi­lat­eral trade be­tween China and In­dia was worth $88 bil­lion in FY19, with a deficit of $53.5 bil­lion in China’s favour.

“A large chunk of these orig­i­nate in China and for those goods, we will pur­sue im­port sub­sti­tu­tion,” a se­nior of­fi­cial said. This will be done mainly by es­tab­lish­ing prod­uct stan­dards, for which the BIS has been given dead­lines.

Items such as pro­cessed food, tex­tiles, leather, toys, and fur­ni­ture — man­u­fac­tured mainly by MSMES — are be­ing con­sid­ered for im­port re­stric­tion.

Drugs and items like tele­vi­sion, air-con­di­tion­ers, and re­frig­er­a­tors are also on the list. Mon­i­tor­ing will re­quire im­porters to reg­is­ter the vol­umes, val­ues, and the coun­try of ori­gin. A sim­i­lar mech­a­nism called the Steel Im­port Mon­i­tor­ing Sys­tem (SIMS) was in­tro­duced in 2019.

Wi­den­ing the re­stricted list for im­ports is be­ing con­sid­ered. For this per­mis­sion from the di­rec­tor gen­eral of for­eign trade (DGFT) is re­quired. The DGFT last month had no­ti­fied moving im­ports of cer­tain new pneu­matic tyres of pas­sen­ger ve­hi­cles, buses/lor­ries, and two-wheel­ers from the free list to the re­stricted list.

In­dia has hiked du­ties on over 3,500 tar­iff lines since 2014. The Depart­ment of Com­merce has been hes­i­tant to raise im­port du­ties, fear­ing higher prices will hurt man­u­fac­tur­ers and ex­porters who rely on for­eign in­puts and are fac­ing a liq­uid­ity cri­sis.

“Rais­ing tar­iffs may not be a fea­si­ble op­tion be­cause higher prices will hurt man­u­fac­tur­ers and ex­porters who rely on raw ma­te­rial im­ports and are fac­ing a liq­uid­ity cri­sis. Be­sides, there are items on the ceil­ings bound by the World Trade Or­ga­ni­za­tion, and du­ties can­not be hiked fur­ther,” said a gov­ern­ment of­fi­cial.

In­ter-min­is­te­rial con­sul­ta­tions af­ter the Prime Min­is­ter’s Of­fice di­rected fram­ing sep­a­rate sectoral poli­cies to se­cure in­vest­ment, find mar­kets, and boost pro­duc­tion ca­pac­i­ties. In­cen­tives for do­mes­tic man­u­fac­tur­ing will be given for “cham­pion sec­tors”, and dis­cus­sions with busi­ness stake­hold­ers to source from a broader range of coun­tries will start.

The Direc­torate Gen­eral of Trade Reme­dies has been asked to step up in­ves­ti­ga­tion into China’s al­leged dump­ing of prod­ucts such as steel, chem­i­cals, ap­parel, and low-value en­gi­neer­ing goods.

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