India’s Export Restrictions, Import Duties on Farm Goods, Reforms come up in WTO Review

The World Trade Organisation (WTO) on Wednesday, 7 January 2020 said export restrictions and prohibitions imposed by India seem to be in contradiction with its main trade policy goal, which is to increase its share of global exports from 2% in 2015 to 3.5% by 2020.

The global trade body, in the seventh Trade Policy Review of India, said New Delhi continued to use trade policy to meet non-trade policy objectives, changing policies constantly, thus diminishing the predictability of the trade policy regime.

India’s previous trade policy review took place in 2015. The ongoing review takes place on January 6 and 8 based on the reports by the WTO Secretariat and India.

“India continues to rely on trade policy instruments such as the tariff, export taxes, minimum import prices, import and export restrictions, and licensing…frequent changes are made to tariff rates and other trade policy instruments, which creates uncertainty for traders,” it said, adding that export licences for specific goods, services or technology may be suspended or cancelled without giving the holder of the licence previous notice.

The WTO secretariat, in its report, said that the lowest duties (Most Favoured Nation tariff) that India imposed rose to 14.3% in 2020-21 from 13% in 2014-15 with the highest tariffs of 60% and above being levied on alcoholic beverages, animals and their products, fruit, vegetables and plants, coffee, tea and certain motor vehicles

“The average MFN applied tariff for agriculture in 2019-20 was 34.8%, a decline from 36.4% in 2014-15. It rose back up to 36.5% in 2020-21,” the WTO Secretariat said in the review report.

“Certain members raised concerns on our unpredictable trade policy, changes in tariffs and our anti-dumping duties,” said an official.

India’s higher import tariff on wheat and sugar were taken up in the review wherein the multilateral trade agency said that India's considerably higher bound tariff rates permit the adjustment of applied tariffs as and when domestic needs arise.

The tariff treatment that India accords to certain goods in the information and communications technology sector is currently the subject of a dispute at the WTO.

On trade remedies, the WTO said that India continues to be an active user of anti-dumping measures and "it is currently the main user of anti-dumping measures in the WTO".

During 2015-19, India initiated 233 investigations, a sharp increase since 2011-14 (June) when the number of initiations were 82. Most of the investigations initiated during the review period relate to products originating in China, followed by those originating in the Republic of Korea and the EU-28. At the end of 2019, India had imposed 254 anti-dumping duties, WTO said.

Taking note of structural reforms undertaken by India such as the Goods and Services Tax, and the Insolvency and Bankruptcy Code, it said: “Investment to improve infrastructure has also been continued, notably to improve transportation and linkages between the interior of the country and ports and airports”.

“Our reforms were appreciated by all including our improved ranking on ease of doing business. Many members also lauded our TRIPS waiver proposal and for raising development issues,” the official added.

On intellectual property rights (IPR) issues, India said that Customs has been regularly intercepting and seizing imported goods infringing these rights, with the total value of seized imported goods for violation of IPRs being Rs 3.8 billion from April 1, 2017- March 31, 2020.

The official added that some countries tried to convince India to join the plurilateral negotiations on e-commerce that asks the participants to take binding commitments.