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Cigarette manufacturers seek retention of QR

K.R.Srivats

NEW DELHI, Feb. 25

THE domestic cigarette manufacturers have urged the Government to refrain from dismantling quantitative restrictions (QRs) on cigarettes with effect from April 1, 2001.

`Cigarettes containing tobacco' form part of the 715 import lines on which QRs are expected to be removed by April 1, 2001 to bring the country's import regime in conformity with its obligations under the World Trade Organisation (WTO) agreement.

In a submission to the Commerce Ministry, the Tobacco Institute of India (TII), which is a representative body of cigarette manufacturers, tobacco farmers and exporters, has suggested that the Government should adopt the GATT Article XX route for retaini ng QRs on cigarettes.

TII has pointed out that Article XX permits Governments to impose restrictions on trade in products that are ``necessary to protect human...life or health''.

``This would be in public interest, which the Government aims to serve through its proposed comprehensive tobacco-related legislation,'' TII has said.

TII, whose three members -- ITC, Godfrey Phillips India and VST Industries -- accounted for more than 90 per cent of domestic cigarette sales, has suggested that cigarettes be included in the list of specific products which require ` `protection''.

It has contended that it would be quite contradictory to allow the ``powerful brand equity of international brands to entice the Indian population to consume tobacco'', given that the Government is committed in principle to adopting a policy of tobacco c ontrol.

Stating that Indian tobacco farmers deserve and must be provided ``protection'', TII has pointed out that the powerful international brand names will have a competitive edge in a situation where advertising would be prohibited after the proposed Tobacco Bill is enacted.

``This will cause an erosion of domestic demand to the detriment of India's tobacco farmers and aggravate the problems already faced by them,'' TII has claimed.

If it is not ``feasible'' to retain QRs on cigarettes through the Article XX route, then TII has said that the customs duty on imported cigarettes should be levied at the WTO bound rate level.