India’s import checks face scrutiny at WTO

India’s recent import curbs have come under scrutiny at the World Trade Organization (WTO), with several trading partners raising concerns over the checks placed by the government as part of its policy to encourage domestic production.

At a recent meeting of the committee on market access, the concerns expressed by the trading partners ranged from tyres and air-conditioners to pulses.

Besides, China lodged a protest against higher customs duty on telecom equipment and some other products. Companies from China, including several global giants from the US and Europe, which were exporting goods from across the border have reason to worry, and Beijing’s concern may be a reflection of that worry. In addition, Chinese companies such as Huawei and ZTE are facing restrictions on supply of 5G equipment.

Similarly, the European Union raised concerns about India’s import policies on tyres. Last summer, the government had decided to licence the import of tyres into the country, moving it out of the open general list. The decision, cheered by domestic manufacturers, has faced criticism from several multinational players.

Further, India’s restrictions on air conditioners were flagged by Japan, although some of the Japanese AC manufacturers were part of the deliberations that led to the curbs. Facing nearly 95% import of components, the government had identified ACs as an item for domestic production boost. It is now part of the list of products where the government has launched production-linked incentives.

Apart from the manufacturing sector, the government decided to impose quantitative restrictions on certain pulses, resulting in complaints by Australia, Canada, the EU, the Russian Federation and the US at the WTO’s committee on market access. Even last year, some of the players had expressed their displeasure.

The government, however, believes that the steps taken by it are in line with the WTO norms and most countries resort to these tools.