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Industry hopes more items to go off negative list

G. Chandrashekhar

MUMBAI, March 30

THERE is great expectation in trade and industry circles that the policy-makers in New Delhi would knock off numerous items from the negative list of imports in the forthcoming export-import policy. Restrictions on export are also likely to be removed. T he new Exim policy is scheduled to take effect from April 1.

Businessmen's optimism stems primarily from the fact that the Government is committed to removing quantitative restrictions (QRs) on imports following the recent agreement with the US and others. QRs on some 1,400 items have to be phased out before March 31, 2001. The phase-out period has been advanced by two years.

Major agricultural commodity groups that are expected to witness liberalised trading environment are foodgrains (wheat, maize), oilseeds, sugar, cotton and spices. A liberal import policy should make domestic processors wanting to source raw material and traders looking for business opportunity happy. However, the perception of domestic producers will depend on the price-sensitivity of the commodity and tariff protection available.

Given the wheat glut the country is facing, it makes little economic sense to keep the export avenue closed. Wheat and wheat product exports may be thrown open although exports will not materialise in view of price disparity. Currently, Indian wheat is a bout 20 per cent more expensive than the world price.

On the import front too, wheat and wheat products may be put under open general licence and the actual user condition mandated for roller flour mills may be withdrawn. The Government has already imposed a customs duty of 50 per cent on wheat. Among coars e grains, maize (corn) imports may be brought under open general licence, subject to some duty and the actual user condition for animalfeed may be withdrawn.

Import of sugar and cotton are free, subject of course to tariff protection. There is no justification for restricting the export option when imports are liberally permitted, particularly in case of items such as sugar in which the country enjoys a clear surplus. Sugar exports may be freed. Similarly, cotton exports, which are under a quota system, may also be thrown open.

In the oilseeds group, there are reports that nigerseed exports may be decanalised and set free. Nigerseed is a minor oilseed generally used as birdfeed in advanced countries. Interestingly, there is a good deal of suspense whether the Government would p ermit private trade to import of coconut oil and refined bleached deodourised (RBD) palm oil in the new policy.

Kerala's powerful coconut lobby is opposed to coconut oil imports despite the fact that consumers here end up paying a price 100 per cent more than what their counterparts in other countries pay. The domestic vanaspati manufacturers are against liberal i mport of RBD palm oil because of perceived competition and the possibility of unfair practices.

Many believe the new Exim policy should encourage barter or counter-trade so that the country is in a position to leverage its import strength. There is also considerable scope for strengthening the role of various commodity boards, export promotion coun cils and similar authorities. The services of these agencies should be marketed on merit. It is hoped that the policy will address these issues.