In this regard, the Director-General of Foreign Trade (DGFT) has issued a clarification.

The clarification follows doubts whether the above rules will apply to all pre-packaged imported goods or only be confined to those goods notified by DGFT on November 23 last year.

In a circular, the DGFT explains that compliance with Indian quality standards is an independent provision and that it will apply to all imports of pre-packaged products as it is to similar domestically manufactured products. The move is aimed at giving the domestic industry a level playing field vis-a-vis foreign companies in the wake of the removal of quantitative restrictions (QRs) on the remaining 715 tariff lines by March 31, 2001.

It is also the government's intention to prevent under-invoicing and other malpractices. The DGFT has also stated that the provisions of the Packaged Commodities Rules will not apply to those imports for which an irrevocable letter of credit (LC) had been established prior to November 23 and imports had been made within the original validity of such LC.

Further, these rules will not apply where shipments had been made prior to this date,the circular said. The twin measure to protect the domestic industry follows decisions taken by the Strategic Management Group (SMG) functioning in the prime minister's office. The group headed by the prime minister's principal secretary Brijesh Mishra, includes the Cabinet Secretary, and secretaries in the finance ministry, the commerce and revenue departments, and the industry ministry. The SMG has been set up to take concrete measures on economic and inter-ministerial issues, including power and irrigation projects. The government, it is stated, has other weapons in its armory to prevent abnormal situations like a surge in imports after the removal of QRs. It will raise tariffs even beyond the bound rates of customs duties.