NEW DELHI: India will need to substantiate reasons for the measures it takes to restrict imports of certain products at the World Trade Organization (WTO), experts have said.
New Delhi has the option of invoking the clauses that relate to protecting national security, public morals or safeguarding human, animal and plant life or health, and conservation of exhaustible natural resourcesNSE 0.00 % to stop some imports. “We need to show the ground for our measures and national security can be one such ground for gold. But to substantiate textile or electronics imports harming public morals and health is hard to accomplish,” said an expert on trade issues.
As per WTO norms, the measures can’t be arbitrary, or mean unjustifiable discrimination between countries or constitute disguised restriction on international trade. The government plans to take steps to promote exporters and restrict non-essential imports in an attempt to curb the current account deficit and increase foreign exchange reserves in the face of depreciating rupee.
Though it will decide the products whose imports would be cut down after consultations with concerned ministries, finished electronics, certain textiles, automobiles and high end consumer products like watches could face the heat. After oil, gold and electronics are the highest imported items in the country. However, the norms give flexibility with respect to gold and silver imports.
These are stringent norms, difficult to comply except in case of gold imports,” said another expert. The US has already invoked the national security exception for raising tariffs on steel and aluminium imports from a host of countries this year. India’s gold imports were pegged at $33.7 billion in FY18 and have been one of the main reason for high gap between exports and imports. Imports of Chinese electrical machinery and equipment, sound recorders and television image and their parts rose 30% on year in 2017-18 to USD 28.6 billion, another cause of the country’s trade deficit.