India is preparing to approach a panel of the World Trade Organization (WTO), seeking its endorsement that the country has complied with a ruling of the multilateral body on a case filed by the US challenging an Indian ban on...
India is preparing to approach a panel of the World Trade Organization (WTO), seeking its endorsement that the country has complied with a ruling of the multilateral body on a case filed by the US challenging an Indian ban on imports of certain American poultry items.
The decision seems to be triggered by the fact that the US hasn’t yet withdrawn the plea at the WTO, seeking approval to initiate retaliatory measures against India for alleged non-compliance of a WTO ruling by the latter.
Both sides, however, are learnt to be still in talks to sort out the matter.
“We still believe the US side will be satisfied with the fact that India issued relevant notification in July to comply with the WTO ruling, and the matter will be buried. But if that doesn’t happen, we are ready to approach the WTO to rule that India has already complied with the order,” a senior government official told FE.
Once the compliance panel of the WTO rules in India’s favour, the US won’t be able to pursue its case against India any further.
In the first week of July, the US sought the WTO authorisation to slap trade retaliatory measures worth $450 million on Indian goods, alleging that India failed to comply with the WTO’s last year ruling in the American poultry case. India has contested the claim, saying it has fully complied with the order.
The WTO’s appellate body had in June 2015 upheld an earlier panel ruling and viewed that Indian ban on the imports of poultry meat, eggs and live pigs products from the US, imposed in the wake of avian influenza in 2011, was “inconsistent” with international norms.
India had sought a year’s time (June 19) to comply with the verdict. On July 8, the department of animal husbandry, dairying and fisheries had issued a notification, detailing new norms for the import of poultry and poultry products, which, India insists, makes the country compliant with the WTO ruling.
In July, the chairperson of the WTO’s dispute settlement body (DSB) referred the matter to an arbitration panel to decide whether the US was entitled to slap more duties on Indian merchandise exports to that country.
Some analysts say a delay of only a few days in the notification is unlikely to weaken India’s intent of compliance of the order. While India has consistently complied with WTO rulings over the years, it’s the US which has a poor record in such compliance, they argued.
The domestic poultry industry estimates that, with India lifting the curbs, US exports of chicken meat to this country could be over $300 million a year, which will only rise in the coming years, thanks to a pick-up in the consumption of protein-based items.
The domestic poultry industry fears that American chicken meat would flood the local market and hurt local businesses. It also fears global food chains like McDonald’s and KFC will opt for such “cheap” American products, which could cost a bulk consumer almost half the price of the domestic chicken legs.
However, government sources had earlier told FE that the domestic industry already enjoys adequate protection, as India imposes a 100% basic customs duty on chicken legs. Also, it will be the middlemen who will be affected by lifting of the restrictions, as they corner a bulk of profits, while farmers won’t be affected that much. Also, there will be more competition and consumers will get protein items at a cheaper rate.