Panel to look into non-tariff barriers of rich

NEW DELHI: Taking a cue from the trade policies of developed countries, India is planning to institute a set of non-tariff barriers to protect Indian industry from falling tariffs under WTO regime. As a first step, the department of industrial policy and promotion under the ministry of industry has commissioned a study to look into the various non-tariff barriers presently employed by the developed countries.
The study group is expected to submit its report in two months, after which the department will look into the feasibility of introducing the relevant ones in India. Some of the industries which are part of the study include automobile, automotive components, construction materials, steel and textiles.
The present initiative by government has come in the backdrop of WTO’s negotiating group on market access flagging off the process of negotiation on trade liberalisation in seven non-agricultural sectors. Trade in motor vehicle parts & components; textiles and clothing; electronics & electrical goods; footwear; fish & fish products; leather goods and stones, gems & precious metals is proposed to be made free of any tariffs in all member countries within a time period.
Though India has opposed any mandatory zero-for-zero duty commitment under the non-agricultural market access, the government officials are predicting a further 50% reduction in effective rate of duty protection permitted under WTO on most of the manufactured items.
“Though zero-duty regime is ruled out for the moment, the government and industry have to be prepared for a situation with average tariff level of 10% on manufactured products as compared to 20% at the moment,� says a senior bureaucrat in the ministry. He says at that level of duty protection, tariff alone won’t be able to provide an effective protection to country’s emerging export sectors like automobiles, auto-components, steel and textiles.
The government, meanwhile, is working on tightening the quality and product specifications for various products manufactured in the country. The Bureau of Indian Standards for products manufactured in the country would be further tightened and made progressively mandatory.
Under WTO rules, the government cannot fix separate quality or product specifications for domestic and foreign goods. Currently, adoption of BIS standards is voluntary for many product groups, as such government can’t put barriers of quality or product specifications for their imports.