Sen panel report is WTO incompatible

New Delhi, March 21 | Updated: Mar 22 2006, 05:30am hrs
The Abhijit Sen Committee report on phosphatic fertilisers has come under cloud, as the commerce ministry has termed it not compatible with the WTO norms.

The panel had recommended that the indigenous price mechanism should be linked to the international prices decontroling the sector.

However, the department of fertilisers, which favours some protection for the ailing domestic industry, had sought a preferential treatment for the domestic producers in fixation of phosphatic prices.

According to official sources, the chemicals and fertilisers minister Ram Vilas Paswan had approved the final note asking a concession ranging from 5-20% on landed cost of the fertilisers. However the commerce ministry has commented on a Cabinet note that the proposal is incompatible with the WTO norms. The note was slated to be sent to CCEA last week. The DoF officials were not available for their comments.

The domestic producers will receive a big jolt as the concessions for phosphatic fertilisers will be further delayed because of the uncertainty in future policy for the sector, the industry sources said.

Consequently, the dependence of the local producers on phosphoric acid will be increased and affect the timely supply of the material during the Kharif season as they will be forced to negotiate prices with foreign suppliers again.

The country imports nearly 60% of the phosphoric acid, a key input for the production of DAP, to meet the local demand. Last year, about 20 lakh tonne DAP was imported.