The World Trade Organization (WTO) has criticized India for its protective trade policy on food items, in an environment that is causing record food prices across the world.
In a review of India's trade and economic policies, published by the WTO this week, the organization stated that India was one of the most frequent users of safeguard measures against imports of food items from other countries.
The review noted that food and agri-sector policies in the country are consistent with the long‑standing policies of protecting domestic producers from foreign competition and consumers from domestic and global price fluctuations.
“The government uses tariffs and non‑tariff measures (NTMs) in its domestic policies to meet these objectives,” the review said. Balancing these conflicting objectives however has been a major problem in India, especially in the past few years when world food prices have increased significantly, it said.
The review also noted that in terms of imports, the number of ‘sensitive’ items has increased since 2007, from 300 to some 415 items, including cocoa, milk and milk products, edible oils, poultry, tea and coffee, spices, and sugar.
State trading is also used as a policy tool, to ensure a ‘fair’ return to farmers, food security, the supply of fertiliser to farmers, and the functioning of domestic support price systems, the report said.
The report further noted that imports of animal products into India require sanitary import permits issued by the Department of Animal Husbandry, Dairy and Fisheries.
“Permits must be obtained prior to shipment from the country of origin. But the Department approves or rejects the application based on an import risk analysis on a case‑by‑case basis,” it said.
Also, imports of animal and fish products are only allowed through certain designated ports where animal quarantine and certification services exist, the report said.
The review further noted that the government changed its policies frequently to meet its domestic needs, restricting, canalising, prohibiting and allowing free exports of products, including food items, within a short period.
"This has resulted sometimes in actions with an anti-export bias (such as setting minimum export prices or applying export taxes), in contrast with the asserted general goal of seeking export expansion," it said.
In terms of India's safeguarding and anti-dumping stance, the review pointed out that between January 2006 and December 2010, India initiated 209 anti-dumping investigations against 34 trading partners, compared with 176 reported in its last review.