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Non-tariff barriers likely in India trade policy

India could impose a slew of non-tariff barriers to safeguard domestic industry when it lifts import curbs on more than 700 goods this weekend to comply with a world trade ruling, government officials and analysts say.

The measures are likely to form part of India's 2001-02 (April-March) export-import policy to be released on Saturday.

"We have enough safeguard measures to stem an import surge," a commerce ministry official said.

The list of goods to be freed this year to comply with the World Trade Organisation decision includes cars, consumer goods, foods, textiles and agricultural items.

India, which right now levies a 35 percent import duty on most of these items, lifted curbs on more than 700 items last year as a first step toward abiding by the WTO ruling.

The government has already pledged to "create a level playing field for our industry during the transition period".

To protect autos, for instance, analysts said there might be non-tariff barriers to accompany a move in last month's budget to hike the duty on second-hand vehicle imports to 180 per cent.

"There could be some non-tariff measures like imports of Euro II (emission) compliant vehicles only and a ban on left-hand drive vehicles while allowing imports," said analyst Satish Jain of Bombay-based brokerage firm ASK Raymond James.

Asking for help

Indian industry has been pressing for non-tariff measures, saying the duties on second-hand vehicles may not be enough to deter a surge in imports.

"Imposition of conditions such as maximum age, emission norms and safety features would be necessary to restrict imports," the Confederation of Indian Industry said in a report.

Media reports suggest the government could ban imports of second-hand vehicles older than five years and require a slew of clearances from testing agencies before allowing cars to enter.

To protect consumer goods, the government could impose non-tariff conditions such as conformity with domestic standards and packaging rules as safeguard measures, analysts said.

Consumer goods on which import curbs are being lifted include colour TVs, ovens, electronic gadgets and processed foods.

"The goods allowed will have to conform to Indian standards, like the Bureau of Indian Standards certification," said D H Paipanandikar of New Delhi economic think-tank RPG Foundation.

"Even in processed foods, they would insist on the retail price on the packaging to protect domestic industry," he added.

On the consumer goods front, in any event, manufacturers appear to have little to fear, a study by the National Council for Applied Economic Research (NCAER) suggested.

"If the markets are opened up, we see greater efficiency by domestic manufacturers in the face of competition," NCAER economist Sanjib Pohit, author of the study, said.

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