 "Piles of steel pipes to be exported are seen in front of cranes at a port in Lianyungang, Jiangsu province")
It said India should strengthen procedures that allowed WTO-consistent actions against dumping (anti-dumping), subsidisation (countervailing duties), and surges in imports (safeguard measures). “Ineffective domestic procedures risk becoming the excuse for broad-based protectionist actions,” it said.
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Earlier this month, the government imposed minimum import prices on 173 steel products ranging between $341 and $752 per tonne. Besides, an anti-dumping duty and a 20 per cent provisional safeguard duty were also imposed on certain steel categories in 2015.
The finance ministry withdrew the customs duty exemption for 76 drugs two weeks ago, including 10 to treat HIV and at least four to treat cancer. Days later, it restored the exemption on three drugs.
India and FTAs
The survey also pitched for a reduction in India’s high tariffs, a key reason why free trade agreements (FTAs) have resulted in higher imports than exports. India has signed 42 FTAs so far, with South Korea, Japan and the 10-nation Asean, resulting in a 50 per cent increase in trade over four years. “The overall effect on trade of an FTA is positive. Increased trade has been more on the import than export side, because India maintains relatively high tariffs and hence had larger tariff reductions than its FTA partners,” said the survey. It added the Asean FTA had the greatest impact as India had to undergo greater tariff reduction under it.
India has one of the highest average tariffs in the world at around 14 per cent.
Among imports metals faced the bigger impact under FTAs, while among exports textiles saw a sharp increase. “The FTAs have led to increased dynamism in apparel, especially in Asean markets, and metals on the import side,” said the report.
The survey said more work was required to enrich the analysis and extend it to services so that a definitive assessment could be made of the overall impact of India’s FTAs.
As exports declined 18 per cent in the first three quarters of the current fiscal year, the survey said the slowdown might continue for a while before a pick-up in 2016-17.
India’s stand at WTO
The survey said India could consider offering at the WTO reductions in its very high tariff bindings and instead seek more freedom to provide higher levels of support to farmers.
The report recommended introspection on five issues: providing support to farmers in light of WTO rules, mitigating the impact of erratic trade policy on farmers’ incentives, reconciling the “big but poor” dilemma that confronts India in trade negotiations, dealing with stresses brought on by the external environment, and engaging more broadly with the world on trade.
It underlined that India’s position in agriculture had changed. “It has become more competitive and relies relatively more on domestic support,” the survey said and suggested India’s WTO obligations could predominantly be based on this shift away from protection to support.
On India’s key demand of a special safeguard mechanism — the right to impose trade barriers in case of a surge in farm imports — the survey argued the mechanism was required only for a small fraction of tariff lines.
