India faces flak at WTO over import curbs

India’s decision to curb inbound shipments of certain types of tyres and ban the import of air-conditioners with refrigerants has once again come under fire at the World Trade Organization (WTO), with various countries calling these measures restrictive and discriminatory.

Almost two years after India imposed these measures, the EU said that only a limited number of licences have been granted to the economic bloc’s tyre manufacturers. At a WTO meeting this week, Taiwan said that the measure is “restrictive and discriminatory.” In the same meeting, Japan criticised India’s move in 2020 to ban the import of ACs with refrigerants, and termed it “superfluous.”

Taiwan said the curbs in place for almost two years have affected its exports to India, resulting in a “sharp decrease of exports in 2020 and 2021 compared with the same period in 2019.”

It also said India appears to issue import licences only for those tyres not produced domestically, and asked how such a measure would be compatible with WTO rules concerning quantitative restrictions. “Taiwan urged India to ensure that applications are properly granted particularly the non-automatic licences, and should not be trade restrictive and have a distortive effect on trade,” said a Geneva-based official aware of the meeting’s details.

As per the official, the EU, Indonesia, the US and Thailand also raised questions over New Delhi’s move.

“Only a limited number of licences have been granted to EU tyre manufacturers and these licences are themselves limited in duration, quantities and types of tyres,” the official said. Indonesia said the policy is inconsistent with the principles of non-discrimination and national treatment.

New Delhi reiterated that the non-automatic licensing requirements for tyres are administered in a manner consistent with the rules of the WTO agreement on import licensing procedures, and that the procedure is being administered in a fair manner.

On the issue of the import ban on ACs, Japan said it “unreasonably imposes a disruptive element in global supply chains” while India argued that the measure is consistent with its obligations under the Montreal Protocol. “However, Japan said this import ban is superfluous and that these air conditioners are subject to neither India’s reduction and initial obligation under Montreal Protocol, nor its domestic regulations,” the official said.

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