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WTO asks protesting countries to sort out issue bilaterally with India

New Delhi, October 15:

Apple exporting countries such as the US, Chile, New Zealand and the EU have locked horns with India over recent port restrictions imposed by the Centre on import of the fruit.

The World Trade Organisation’s agriculture committee (CoA) has advised the countries to settle the matter through bilateral discussions, but it might boil over into a larger dispute if no understanding is reached.

“Some countries tried to rake up the matter at a recent meeting of the CoA, but India opposed the move by asking the members to first state what provision of the Agreement on Agriculture had been flouted,” a Commerce Ministry official told BusinessLine.

The Commerce Ministry had issued orders on September 14 restricting import of apples only to Nhava Sheva Port in Navi Mumbai. The move is likely to give some relief to local producers of apples in States like Himachal Pradesh, Jammu & Kashmir and Uttarakhand, who had taken a hit due to a sharp increase in import of apples earlier this year and the resultant drop in prices.

But apple exporting countries are, obviously, unhappy as disallowing imports from ports such as Chennai, Kolkata and Krishnapatnam, is adding to their transportation costs. Traders have estimated that prices of imported apples could go up by Rs. 50 per kg (from existing prices of Rs. 100-150) by December if the port restrictions are not removed.

Although the CoA Chairman asked the complaining countries to first try and sort out the matter bilaterally with India, the Centre does not seem to be in a mood to relent.

“The decision to restrict imports of apple to one port had been taken to streamline our import procedures and does not concern other countries,” an official in the Directorate-General of Foreign Trade (DGFT) said.

Import of apples into India from countries such as the US, China, Australia, New Zealand and Italy increased to over 2 lakh tonnes in 2014, a 5 per cent jump from the previous year. Domestic production of apples is about 19 lakh tonnes annually. Imports shot up sharply early this year as traders feared a slump in production in Himachal Pradesh and Uttarakhand due to adverse weather conditions. However, there was no major loss of crop.

Interestingly, while the Agreement on Agriculture may not have any specific rules against imposing port restrictions, the General Agreement on Tariff & Trade (GATT), the foundation stone of the WTO, may have provisions that could be used to challenge the port restrictions.

(This article was published in the Business Line print edition dated October 16, 2015)

 

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