QRs system dismantled

By Sushma Ramachandran

NEW DELHI, MARCH 31. The Government has dismantled the system of quantitative restrictions (QRs) on imports and announced a strategy to promote agricultural exports as a step towards achieving a one per cent share in global trade.

The Export-Import Policy for 2001-2, unveiled here today, lifted QRs on 715 tariff items leaving only 600 defence and health related items under the scheme of import quotas. It also introduced several safeguards against import surges including sanitary and phyto-sanitary measures as well as non- tariff barriers such as keeping state trading companies involved in imports of bulk products such as wheat, rice, urea, petrol, diesel and aviation turbine fuel. A standing official group has been set up to provide an early warning system on imports of ``sensitive'' products.

With the QRs removed, a wide range of products, ranging from automobiles and coconuts to pencils and exercise books, can now be imported. The phase-out, begun in 1996, has now been completed to fulfil a commitment made to the World Trade Organisation. The countries still using QRs are Bangladesh, Pakistan, Sri Lanka and Tunisia.

Export strategy

Outlining the highlights at a press conference, the Commerce and Industry Minister, Mr. Murasoli Maran, said a medium-term export strategy for the next five years was on the anvil. The present policy covers the last year of the existing five-year policy initiated in 1997-98. Refuting suggestions that this would be the last Exim policy in view of trade liberalisation, he said a lot remained to be done.

Expressing confidence of achieving an 18 per cent export growth this year, Mr. Maran said a market access initiative would be launched to assist the industry with a product and country- specific focus. Several concessions had been announced for the Special Economic Zones including giving the SEZ developers infrastructure status under the Income Tax Act. The pending demands of exporters on softening of interest rates on export credit and revival of tax benefits were being examined in consultation with the Finance Ministry and the Reserve Bank.

Primacy would be given to promotion of agricultural exports since there was a great opportunity for Indian farmers in the context of the agriculture negotiations at the WTO. ``The Cabinet has appointed a Group of Ministers to look into the matter and very soon an appropriate agricultural export policy will be evolved.'' Duty exemption and export promotion capital goods (EPCG) schemes will now be applicable to the agro sector as well.

Listing the new safeguards, the Minister said imports of wheat, rice, maize, petrol, diesel, urea and ATF would be permitted only through the designated state enterprises. He declined to describe this as ``canalising'' imports since these enterprises would function on commercial principles. Secondly, import of all primary products of plant and animal origin would be subject to import permits issued by the Agriculture Ministry after an import risk analysis based on sanitary and phyto- sanitary measures.

Thirdly, import of second-hand cars over three years has been banned, and other such imports allowed only through Mumbai port. Import of foreign liquor, processed food products and tea wastes are being made subject to existing domestic regulations concerning health and hygiene. Textiles using azo dyes will not be allowed.

Despite these measures, Mr. Maran said ``eternal vigilance'' was essential to guard against imports flooding the country. A group, comprising the Secretaries of Commerce, Revenue, Small Scale Industry, Animal Husbandry and the Director-General of Foreign Trade, will function as a ``war-room'' for tracking, collating and analysing data on 300 ``sensitive'' items. A monthly import status report will be issued on these items.

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