Page 172 - DECO303_INDIAN_ECONOMY_ENGLISH

Unit 10: GATT, WTO and Indian Economy

those goods that are competitively priced always have a chance to jump over high tariff Notes
walls.
On the other hand, QRs in the form of quotas and licensing requirements that allow only
a few players or entities to import (“canalising”), effectively put a limit or ceiling on
imports, even if there is a domestic market for these products for reasons apart from price
such as technology, features, convenience, etc.
At one point of time, India had the “distinction” of being grouped with Tunisia, Nigeria,
Pakistan, Bangladesh and Sri Lanka as the only countries that continued to persist with the
import quota system.
However, the GATT provides exceptions to this fundamental principle. Members are
allowed to impose QR in a non-discriminatory manner for any of the following reasons:
1. Imports

To safeguard the balance of payments position
As a safeguard measure when there is serious injury to domestic producers
Restrictions on any agricultural or fisheries product, when there is a temporary
domestic surplus of the product or when there is over-dependence on an
imported product
Protection of public morals

To protect domestic industry at a developing stage (“infant industry protection”)
Security, arms and ammunition, nuclear material
Health of human, animal and plant life
Gold and silver trade

Monopolies enforcement
Protection of patents, trademarks and copyrights
For the application of standards or regulations for the classification, grading
or marketing of commodities in international trade

Products made by prison labour
Protection of national treasures
Conservation of exhaustible natural resources

Approved inter-governmental commodity agreements
2. Exports
To prevent or relieve critical domestic shortages of foodstuffs
For the application of standards or regulations for the classification, grading
or marketing of commodities in international trade.
Quantitative restrictions can also be imposed subject to the authorisation of the other
members as a retaliatory measure when the recommendations and rulings of a dispute
settlement panel are not implemented within the given reasonable period of time.
The GATT requires that application of the QR be made public with information about the
total quantity or value of the product permitted to be imported during a specified future
Contd...

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