Government looking at non-tariff barriers to curb Chinese imports

Amiti Sen New Delhi | Updated on August 04, 2020

Stricter quality norms, more import licences among options; domestic MSME needs, WTO rules to be kept in mind

To check the inflow of non-essential imports, primarily from China and Hong Kong, the government will focus on non-tariff barriers (NTBs) that are mainly a mix of stricter quality standards, such as mandatory certification requirement from the Bureau of Indian Standards, and imposition of import licence restrictions, according to officials dealing with the matter.

The Commerce & Industry Ministry is in consultations with a number of other line-Ministries to evaluate the best-suited NTBs for imports that are to be regulated including that of consumer items such as footwear, furniture, plastic goods, toys, leather products and sports items.

“Imposing non-tariff barriers is what will give us quick and targeted results in terms of checking imports from select destinations to the extent required. The government will of course keep raising import tariffs wherever possible but it has to also ensure that domestic shortages are not created,” an official familiar with the matter told BusinessLine.

The Centre is trying to increase import curbs on products from China in order to bridge its high trade deficit with the country, valued at $48.66 billion in 2019-20. India also wants to send a strong message to its neighbour, which is creating trouble at the India-China border in the Galwan valley. Imports from Hong Kong and some other South-East Asian countries are also under the radar, as there is a fear that Chinese goods are being routed through these countries.

Quality control norms

Draft Quality Control Orders on toys and electrical equipment, requiring mandatory quality certification from BIS for both imports and domestically produced items, have already been notified to the World Trade Organisation (WTO), seeking comments of members, the official said.

“In fact, the government is trying to speed up domestic consultations on quality control norms and BIS certification requirement for most of the 371 items short-listed by the Commerce Ministry earlier this year,” the official added.

However, while stricter quality norms can serve to hold up imports as certification would be completely up to the BIS, the government cannot ignore the fallouts of higher quality standards on MSMEs, the official said.

Trouble at WTO

The other option, of imposing licence requirements for imports, already implemented last week in the case of televisions, helps to check imports without affecting domestic producers. It slows down imports as licences need to be obtained and the matter is completely in the hands of the government. But, if used rampantly, it could cause trouble at theWTO.

“While imposing licensing requirement is the easiest form of NTB as it places no obligations on the domestic industry, it is not used often by governments as it could fail to pass muster at the WTO, especially on grounds of lack of transparency if a particular country is targeted,” a Delhi-based trade expert explained.

Despite the possible trouble at the WTO, the government is looking at imposing licensing requirements for some more consumer items in the months to come as some other countries, too, were putting in place such measures especially to deal with Covid-19 related disruptions, the official added.

Published on August 04, 2020

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