EXIM POLICY AND REMOVAL OF QRs

While announcing the revised Exim Policy on 31/3/2000, the Union Commerce & Industry Minister, Mr. Murasoli Maran, emphasised that tariff protection would continue to be available even after the phase-out of quantitative restrictions (QRs) on imports. Further, in the event of unfair trade practices like dumping or subsidisation of exports by other countries causing injury to the Indian industry, adequate protection under anti-dumping or anti-subsidy mechanisms would be available and in case of a sudden surge in imports, causing serious injury to the domestic industry, protection under safeguard provisions would always be available, Mr. Maran said. Besides the industry could always approach either the Anti-Dumping Directorate or the Safeguard Directorate for appropriate relief.

Dwelling at length on the need to safeguard the interests of the domestic industry, Mr. Maran said "I also realise that in the context of the withdrawal of QRs, we have to be more alert and an institutional mechanism will have to be evolved to study, analyse and recommend appropriate tariff structure to maintain balance between the interests of producers and users/consumers. The suggestion given is that maybe the Tariff Commission could be strengthened to play the role of an independent expert body to advise on these matters. While we have been able to strengthen the Anti-Dumping Directorate to make it effective, perhaps adequate attention has not been paid to the strengthening of the Tariff Commission to make it a useful and purposeful organisation. I am looking into this aspect also. I am confident that scrapping of QRs will not hurt Indian industry and the doubts and apprehensions now exhibited in some quarters are exaggerated and not well founded. On the other hand, I would request the industry to consider this as an opportunity and initiate steps to increase their competitiveness".

Quantitative Restrictions (QRs) on imports in respect of 714 items have been removed with effect from 1/4/2000. This formed part of the Export and Import (EXIM) Policy announced in New Delhi on 31 March, 2000.

QRs were being maintained ever since 1947 on balance of payments (BOP) grounds under the on 31 March, 2000.

QRs were being maintained ever since 1947 on balance of payments (BOP) grounds under the General Agreement on Tariffs and Trade (GATT) to which India was a signatory. India participated in the 7-year long Uruguay Round Negotiations (1986-1993) which culminated in the signing of the Uruguay Round Agreement in April 1994 and became a founder member of the World Trade Organisation (WTO), which came into being in January 1995. India subscribes to all the WTO Agreements, but continues to maintain QRs on BOP grounds. However, with the improvement in the BOP position, some members of the WTO disputed India's justification or need to continue QRs on imports for BOP reasons. India could negotiate with most of her trading partners -- with the exception of USA -- to arrive at a mutually agreeable solution for phasing out the QRs. The US filed a dispute at the WTO and the Dispute Settlement Panel (DSP) of the WTO constituted in November 1997 ruled against India. India filed an appeal before the Appellate Body of the WTO against the findings of the Panel, but the Appellate Body also upheld the findings of the Panel, challenged by India. Consequently, QRs have to be withdrawn. An Agreement was signed between India and the US for determining the reasonable period of time under which QRs being maintained on the remaining 1429 tariff lines were to be removed in two phases - 714 to be removed by 1/4/2000 and the remaining QRs by 1/4/2001.

? List of 714 Items where Quantitative Restrictions (QRs) have been removed