US, Canada may object to India's quantitative cap on pulses imports

Rutam Vora Ahmedabad | Updated on February 23, 2019 Published on February 23, 2019

Senior Commerce Ministry official says discussions will be conducted before a dispute is filed at WTO

India is set for another trade face-off with the United States and Canada at the World Trade Organisation (WTO). According to a senior Union Commerce Ministry official, the US along with Canada is likely to raise objection at the WTO opposing quantitative cap on pulses imports.

This is separate from the objections filed earlier this month with the WTO on India’s alleged "under-reporting" of market price support for five varieties of pulses under the minimum support price (MSP). Santosh Kumar Sarangi, Joint Secretary, Ministry of Commerce & Industry, Department of Commerce, Government of India said, “Recently, we had implemented quantitative restrictions for pulses imports. But now we are receiving the news that the US and Canada are planning to take us to WTO objecting to the step.”

Speaking on the sidelines of the 17th Global Castor Conference in Ahmedabad on Saturday, Sarangi told BusinessLine, “I think they will give us a notice for a first round of discussion.” He, however, clarified, “This (objection) has not gone to the stage of dispute. This is currently at the stage, where they want India to clarify. India is going to provide this clarification. Once that is given, they may not go to dispute stage. So, unless a dispute is filed, we can’t say they have filed it (dispute).” The date for the mutual discussion on the matter is still to be decided.

The quantitative restrictions on pulses import was necessitated following cheap imports of certain pulses. The Directorate General of Foreign Trade (DGFT) had in 2017 and 2018 had imposed quantitative cap on pulses imports to protect the interests of the domestic farmers. When asked if the Centre was considering to put quantitative cap on imports of other commodities such as edible oils, Sarangi stated that tools such as quantitative restrictions are not fully WTO-compliant, but can be implemented unless there is a dispute.

However, in order to protect farmers’ interests, the Government is exploring various options and mechanisms to control cheap imports, “that cannot be challenged in the WTO.” “These can’t be shared right now. It can be shared only when it is being implemented,” added Sarangi.

The process of raising an objection at the WTO first involves a call for mutual discussion and the complainant seeks clarification from the respondent nation. If the move is justified and accepted, the dispute doesn't get filed. But if after such discussions, objections remain, a "dispute" is filed at the WTO. Following which, a dispute panel is constituted and this panel gives its final verdict. There is an opportunity for appeal in the appellate body as well.

Published on February 23, 2019
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