The latest reintroduction of licensing on the imports of laptops, desktops and tablets, India’s most important import objects inside the Harmonised Tariff Schedule (HTS) class 8471, raises some puzzling commerce coverage questions.
To start with, why revive a commerce coverage instrument of a bygone period, which additionally occurs to violate the WTO agreements to which we’re a signatory? As a substitute, why not depend on tariffs? A straightforward-minded reply could be that the commerce ministry, which issued the order, has the authority to impose licensing however not elevate tariffs. Authority for the latter resides within the finance ministry. My very own inclination is to reject this rationalization on the grounds that there needed to have been inter-ministerial dialogue on such a significant resolution.
An alternate risk is that GOI needed to take a discriminatory strategy to proscribing imports vis-a-vis totally different buying and selling companions. In precept, this too, could possibly be completed by means of the next discriminatory tariff on the goal nation, simply because the US had carried out to limit its metal and aluminum imports in 2018. Nevertheless, this might have attracted extra consideration since it might have required explicitly naming the goal nation. In distinction, licensing has the advantage of conducting the target by quietly denying the licence at any time when the supply of imports occurs to be the goal nation.
This rationalization provides rise to the query of what could possibly be the aim of concentrating on a selected nation. Since China is the apparent goal nation on this case, and it accounted for a hefty 54% of India’s HTS 8471 imports in 2022, potential solutions embody safeguarding nationwide safety, inflicting harm on the supply nation and defending home trade. Think about every of those solutions in flip.
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Views expressed above are the creator’s personal.
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