In this year's Exim policy dairy products including whole milk, yogurt, butter milk, curdled milk, cream, concentrated, evaporated and condensed whey, grated or powdered cheese and blue vein cheese have been included in the OGL list. Speaking to The Financial Express, president, Indian Dairy Association, A Banerjee said that as long as the prices of the imported products are less than the prices of the domestic ones, there is no threat to the Indian industry. However, cautions Banerjee, if the products imported are cheaper than the domestic one, the entire dairy industry will crumble."The Indian dairy industry operates on very low margins. It will not be able to withstand price competition fromforeign countries." Since India is already signatory of the World Trade Organisatiion (WTO), the removal of quantitative restrictions on imports is inevitable, says Banerjee.

"But the government should take ample measures to see that liberalisation is not at the cost of the Indian industry."

The government should develop a mechanism to scrutinise the movement of international prices so that they can impose suitable tariffs on imports, says Banerjee. "There is a danger of India becoming a dumping ground for various developed countries who provide different kinds of subsidies to their industry. The government needs to watch the developments taking place in the international market like a hawk," he added.

Banerjee says that the tariff structure should be adjusted with changing market equations so that margins of the domestic industry is not affected.

According to the secretary of Cifti, Vijay Sardana, to empower the domestic industry to fight foreign competition the government should make superiortechnology easily accessible to the domestic industry. "All the developed countries are using the latest technology like aseptic technology for milk processing. Our milk products are manufactured by using conventional methods and cannot compete with imported products manufactured using sophisticated technologies," he added.

Sardana says that high import duty on capital goods is preventing Indian companies to buy modern machines and it should be brought down. "An import duty of 40 per cent is too high for the Indian manufacturers to bear. On a machine costing Rs 5 crore, a person has to shell out an extra Rs 2 crore which he simply cannot afford."

In order to provide the Indian industry with a level playing field, import duties have to brought down, stresses Sardana.

There is, however, a brighter side to things, points out Sardana. "The decision to allow foreign companies to enter the country with new products can act as a catalyst for new ideas to be floated in the market."

Sardana cites the exampleof fermented products. "The market for fermented products is not developed in the country. By opening the sector to foreign players a whole lot of new ideas will be generated for the Indian industry which they can subsequently exploit. "