New Delhi has trashed a US government report that claimed 30% of food imports into India is illegal. The commerce ministry said the claim was designed to deflect attention from Washington?s ?huge trade distorting farm subsidies and non-tariff barriers?.
The US department of agriculture?s foreign agricultural service, in a report, said over a quarter of food imports to India was through ?smuggling and leakages from duty-free outlets and ships at docks?.
The report said the grey market has troubled importers, as they have to operate legally by shelling out high import duties. It, however, acknowledged that with tariff cuts and trade liberalisation, smuggling was on the decline. Washington?s report means India is not paying the full price for its food imports.
But commerce ministry officials said it was not as simple as suggested by the US to smuggle wheat, rice, corn, soya oil and other food items in bulk into India. Instead, imports of items like almonds to India from the US have shown an increase, they said, adding that all these items were coming through legitimate channels.
?We are supporting Brazil in the WTO in the on-going probe against US farm subsidies. Besides, India?s marine exports to the US have fallen due to their additional customs duties and non-tariff barriers. India has filed a complaint against this issue and hopes to win the battle. The US has far more non-tariff barriers than India,? a commerce ministry official said.
In the report, the US blamed India?s complicated food laws, restrictive domestic marketing and distribution policy as well as difficult customs clearance system as challenges for their companies to export food and beverages to India.