Products under ‘others’ category could face higher duty or a requirement for a licence to import such items
Exports shrank for fifth straight month in Dec by 1.8%, imports contracted for seventh straight month at 8.8%
New Delhi: Imports of uncategorized items may soon require special licences, with the commerce ministry seeking to curb such imports by shifting them to a restricted list in a month, trade minister Piyush Goyal said.
“We have a big problem in our imports of a category called ‘others’. In that category, all sorts of stuff are being put in and imported into the country. The last analysis I got done, I found one out of four products being imported in the ‘others’ category," Goyal said at the National Standards Conclave on Wednesday. “I appeal to everybody, who is importing any product or service into the country, please categorize your product into the respective HSN (harmonized system of nomenclature) code where it falls. If your product is imported in sufficient measure, it requires a separate HSN code."
Importers may face serious consequences if they fail to comply with the directions, the minister said. These could be higher duty on products that come under the “others" category or requirement for a licence to import such items, he said.
“In one month or so, I will restrict the import of every product that goes in the ‘others’ category. You will have to approach us, take a special licence without which you cannot import any product in the ‘others’ category. Either the import duty will be increased exorbitantly or a special duty imposed, so that FTA (free trade agreement) countries also will bear it," he said.
There are 2,500-3,000 items on the “others" list that are not well-defined, a commerce ministry official said on condition of anonymity. “There is a tendency on the part of the importer to mis-classify some items as ‘others’, which can be prevented by better enforcement. However, India has the prerogative to impose a special tariff line for such items," he said.
This will put greater onus on importers to correctly classify goods and services and minimize classification under the residuary head of ‘others’, said Ranjeet Mahtani, partner at Dhruva Advisors, a consultancy firm. “This proposal will impact India’s trade patterns, when it has been concerned with a bulging import bill," said Mahtani.
Mint reported on 3 January that India was set to implement stricter quality standards for 371 items by March, a move aimed at curbing imports of non-essential items such as toys, plastic goods, sports items and furniture, especially from China.
The way forward is to adopt world-class standards with a greater degree of confidence, to accept that as the reality of the 21st century and work collectively to change the mindset, Goyal said. “We need to work together to genuinely see the quality standards coming into play and becoming an enabler of trade, rather than a detriment to the progress and development of the country."
India aims to boost its manufacturing exports to create more jobs and limit non-essential imports to reduce its burgeoning trade deficit with countries such as China.
Meanwhile, data released by the commerce ministry on Wednesday showed India’s exports contracted for the fifth consecutive month in December by 1.8%, while its imports shrank for the seventh straight month at 8.8%, narrowing the trade deficit to $11.8 billion.
Non-oil, non-gold imports continued to record a substantial contraction of 12.2% in December, reflecting subdued commodity prices as well as the weak demand conditions in the economy. “The double-digit contraction sustained by non-oil, non-gold imports for three months in a row is a cause for concern," said Aditi Nayar, principal economist at ICRA Ltd. “The reversal of non-oil merchandise exports to a contraction in December, led by gems and jewellery, chemicals after the modest growth seen in the previous two months, is a clear disappointment."