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India's port order a non-tariff barrier: Analysts

The government's decision to limit imports of hundreds of consumer goods to selected entry points is a non-tariff barrier aimed at protecting domestic industry from a possible surge in imports, analysts said on Tuesday.

India announced last week that the government had restricted the entry of 300 consumer goods including edible oils, toys, liquor, sugar and cigarettes to only 11 entry points compared with 211 previously.

Under a revised order, edible oil can now be imported from eight additional ports.

The government said the decision to limit imports to select entry points was aimed at monitoring any surge in imports of the 300 items.

"It's clearly a non-tariff barrier. It's making imports of these goods that much more difficult," Subir Gokarn, economist with the New Delhi-based National Council for Applied Economic Research said.

Fears of a spurt in imports have increased since India removed curbs on more than 700 items in its trade policy in March to comply with a World Trade Organisation pact.

Analysts said the government had imposed non-tariff barriers because it could not increase duties on most of these items, which are already at peak rates allowed under the WTO agreement.

"Most of the items are at a 35 per cent bound rate. So this is the only measure the government could have adopted to check a surge," Gokarn said.

The government's move is also aimed to "mollify domestic manufacturers" and avert any criticism of acting too slowly in case of an increase in imports, analysts said.

"It's clearly a move to protect domestic industry which is reeling under low production figures," said Sanjeet Singh, an analyst with Bombay-based brokerage I-Sec.

Analysts said the order would lead to further congestion at the designated ports, increase costs and time overruns, which in turn would discourage imports.

"The delays will discourage potential imports and add to costs," Gokarn said.

Commerce and Industry Minister Murasoli Maran, while unveiling the country's 2001/02 export-import policy in April, had said the government would set up a "war room for tracking, collating and analysing data on 300 sensitive items" of public importance.

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