Port Wings Editorial: Apple Import Restrictions Put India in the Dock in WTO

Source: http://www.portwings.in/editorial/apple-import-restrictions-put-india-in-the-dock-in-wto/

Port Wings, October 28, 2015

As anticipated, members in the World Trade Organization put Government of India in the dock on the latter’s decision to restrict import of apples to only one port against a dozen located on West Coast as well as in East Coast of the sprawling country.

Even though the Indian representative successfully defended the move by banking on the very statute meant for global trade, where there is no ban on restricting movement of any goods to only one port of the WTO member country, the defence may be satisfying to the others at WTO but relatively failed to bring cheer among the importers back home.

India also defended the move by saying that the measure does not fall within the definition of an import licensing measure under the Agreement on Import Licensing Procedures and thus is not fit for discussion under the WTO Committee.

However, the Directorate General of Foreign Trade under the Ministry of Commerce is duty bound to explain to the consumers of imported apples, if not for the importers, on what grounds the decision of restriction on apple import has been arrived.

Despite defending it hollowly at the WTO on the issue, continuing delay from the government on categorically revealing the real reasons behind the sudden restriction leaves options for different interpretation of its intention.

While a section of trade feels it was an act of protectionism by the Modi-led Government to secure local market access for home-grown apples, another group feels it was done in a hastily manner to help a particular player who wants to control the country’s apple market.

Whatever said and done, it is in crystal clear terms that the apple production in home is able to fulfill only 50 % of consumption and the remaining are managed by imports from various countries including the USA, Australia and New Zealand.

And that’s why, these countries vociferously objected to the DGFT’s latest decision to restrict apple imports by terming that the measure has had an impact on trade.

Moreover, after the restriction of import of apples, the cost of Indian apples are likely to increase on par with the imported ones in the areas like Southern India, where the logistics cost to move apples from growing states that are in North India is almost same as importing them from other countries.

So, the government, which has been so far keeping mum on the issue despite demands to disclose the real reasons from different quarters, has to make it clear what it wants. It is time to understand the Newton’s third law which says --For every action, there is an equal and opposite reaction. India has already acted and this time, reactions may be from USA, Australia and EU nations, where India is exporting various goods.