'Intervention may be necessary'

By V. S. Sambandan

CHENNAI, Feb. 22. Studies by the Union Commerce Ministry on the impact of removal of Quantitative Restrictions (QRs) on imports show that while the overall import basket remains largely unaltered, some ``interventions'' could become necessary with increases in the import of certain consumer products, according to a Ministry document.

While there has been not much change in the overall import composition after the gradual lifting of QRs since 1996, the imports of some consumer items in 2000-01 such as dry battery cells, umbrellas, glassware, apples, locks, toys and writing instruments, among others, ``have been found to be witnessing significant import increases calling for some interventions by the Government.'' For instance, a total of 2.32 crores of pen nibs valued at over Rs. 60 lakhs were imported between April and September 2000. Two items - pen nibs and writing brushes - under the 8- digit HS classification have accounted for nearly Rs. 7.8 crores of imports between April and September 2000.

At a broader level however, there is the reassurance that the composition of Indian imports has not changed drastically even after the lifting of QRs. Emphasising that the list of 714 items on which QRs were removed on April 1, 2000 includes those that are ``by far the most sensitive from the point of domestic production'', the Commerce Ministry document states that `` the experience of the first six months of 2000-01 has not been largely different from the experience of earlier years.'' And, at the macro-level, ``Imports during the period April-October have shown an indicative growth of 14 per cent.''

Though the phased removal of QRs had commenced in 1996, it was only from 1998-99 onwards that the ``freed'' items included ``finished goods for which there was significant domestic production capability.'' To begin with, 488 tariff lines were freed in 1996- 97, followed by 391 in 1997-98, 894 in 1998-99 and 714 on April 1, 2000. And, 715 tariff lines are to be freed on March 31 this year.

The point that the country's import basket ``has not been affected significantly'' is reinforced by the observation that ``the top 20 product groups out of 97 classified groups constituted 87.8 per cent of the country's imports in 1995-96, 88 per cent in 1996-97, 87 per cent in 1997-98 and 86.85 per cent in 1998-99. The reasons given for the consistency in the import basket are that the ``tariff structure maintained by India is a significant barrier'' and ``imports will take place only in response to the demand-supply situation irrespective of whether QRs are maintained or not.''

Monitoring of some "sensitive products''

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