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The European Union has called out India for not submitting a notification to the World Trade Organisation (WTO) on the restrictions announced on import of pneumatic tyres in June, and has sought clarifications, including details on import procedures and timelines.
It also demanded that India should specify the number of applications received under the new licence regime (since its entry into force) and the imports that have taken place under the new regime so far, in a submission made to the Committee on Import Licensing of the WTO.
“The EU notes that India has not submitted yet a notification on ...‘Amendment in Import Policy of Tyres’, whereby the Directorate General of Foreign Trade of India (DGFT) announced that it is moving pneumatic tyres for motor cars, buses, lorries, motor scooters and motorcycles from the ‘free’ category to the ‘restricted’ category,” the EU stated in its submission.
This means that while the earlier imports of the identified items were allowed freely, subject to the payment of import duties, it can now take place only after importers obtain a licence from the DGFT.
The EU has also asked India when it would be submitting the notification since it was required under WTO rules.
To regulate imports
One of the reasons for the move could be to regulate imports and ensure that the market does not get flooded with cheap imports from countries such as China. India imported new pneumatic tyres worth $369 million in 2019-20, as per the figures put up by the Commerce & Industry Ministry.
In April-September, imports of new pneumatic tyres were at $82.66 million. Although the WTO does not disallow import licensing, the requirement is that the process should be simple, transparent, and predictable so as not to become an obstacle to trade.
The EU, in its submission, asked India to clarify why it sought to introduce the new measure requiring a licence to import pneumatic tyres.
It also sought to know whether it was a non-automatic licence and if India would give an overview of the applicable import procedures, including the timelines.
The EU further asked India to specify the number of applications received under the new licence regime since its entry into force, and the total quantity imported under the new licence regime.
“Could India inform us whether and when Indian authorities issued guidelines on how to obtain the relevant licence, within the relevant time frame as required under Article 3.5 of the WTO Agreement on Import Licensing procedures? If yes, please provide a copy of these guidelines,” the submission stated.
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