(MENAFN- Live Mint)

New Delhi: India has come under scrutiny at the World Trade Organization (WTO) over its import restrictions and quality control orders (QCOs). In a draft report released on Thursday, the WTO's committee on market access noted that multiple members had questioned whether these measures constituted trade barriers.

The WTO committee's draft 2025 report showed that India remained prominent among the countries whose policies were challenged, even as it actively participated in technical work on tariff schedules and notifications.

According to the report, India's quantitative restrictions on pulses came under repeated scrutiny from Australia, Canada and the European Union. Its QCOs on tyres and air conditioners also attracted queries from members including the European Union, Indonesia, Chinese Taipei (Taiwan), and Thailand, who argued that such measures could limit market access and increase the compliance burden for exporters. China raised a concern over pocket lighters, while Japan and Thailand did so for air conditioners. Interestingly, the US did not raised any concerns about India's move to introduce a series of QCOs.

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QCOs are mandatory government regulations that require specific products to conform to designated Indian standards and carry the Bureau of Indian Standards (BIS) mark before they can be manufactured, sold, or imported. Issued by various ministries, QCOs protect consumers from substandard goods, promote quality, and prevent the import of low-quality items by serving as a non-tariff barrier.

'Precarious position'

India is becoming self-reliant in air conditioners as the government's production-linked incentive (PLI) scheme for white goods has significantly reduced imports of compressors, and compressor production is expected to touch 8 million units by 2028-29, following three PLI phases rolled out between April 2021 and January 2024, as per a Mint report published on 8 April.

Trade experts noted that India was in a delicate position.“While using QCOs and import restrictions to boost domestic manufacturing, its exporters face challenges from sustainability-linked rules and reciprocal tariffs. This dual pressure is drawing India deeper into WTO disputes even as it negotiates bilateral trade deals," said Vinod Kumar, president, India SME Forum.

Mint reported on 9 September that India was under fresh scrutiny at the WTO over its failure to respond to farm trade-related queries that had accumulated for more than a decade. As per a secretariat report, the country has the longest list of pending queries at the WTO. The updated WTO note, issued on 8 September, listed 186 unanswered questions from 2013 to 2023, and another 51 from 2024 onwards, of which 30 were pending as of 5 September.

Finger on the pulses

India's quantitative restrictions on pulses imports – which are particularly relevant given the country's status as the world's largest buyer of lentils and peas – faced pushback from Australia, Canada and the European Union. Australia and Canada are major suppliers of pulses to India, which also imports smaller quantities from EU members such as France, the Netherlands and Belgium.

According to the WTO document, the EU supported Australia's and Canada's stand on import restrictions for pulses and urged India to have a more predictable, open, and transparent import and tariff regime for certain varieties of pulses.

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India has tightened its import policy on pulses by reintroducing duties on several varieties while temporarily allowing duty-free access to some. From 1 April 2025, imports of chana (black gram) are subject to a 10% duty after the government ended the earlier exemption. Similarly, from 8 March 2025, lentils (masoor) began attracting a 10% levy, comprising a 5% basic customs duty and a 5% agriculture infrastructure and development cess.

Imports of moong continue to face restrictions in line with the government's broader strategy of protecting domestic farmers. In contrast, yellow peas and tur dal have been granted duty-free entry until 31 March 2026 to ease local supply shortages.

Other import licensing procedures and regulatory requirements were flagged as potential obstacles to trade, such as import restrictions on pharmaceuticals, and restrictions on wooden boards and viscose staple fibre – both flagged by Thailand.

In December 2022, the ministry of textiles notified the viscose staple fibre QCO, while the ministry of commerce and industry issued the wood-based boards QCO in March 2024. In September 2025, India imposed import restrictions on a chemicals used in the pharmaceutical industry, effective until 30 September 2026.

Queries sent to the commerce ministry remained unanswered at the time of publishing.

India's defence

Defending these measures, India maintained that the QCOs were meant to ensure consumer safety, curb substandard imports, and support domestic industry in meeting quality benchmarks. New Delhi argued that the introduction of standards and restrictions was well within the WTO's rules, as long as they were non-discriminatory and justified on the grounds of safety and public interest.

On import restrictions for pulses, New Delhi said in its submission at a formal meeting on 9 April that the measures adopted by India were undertaken to maintain food and nutrition security.“This is an area of great importance to our economy, and the policies on imports are regularly reviewed and updated. The trade measures applicable to the import of pulses are in compliance with the relevant WTO agreements and the specified procedures of those agreements," it stated. India also highlighted its compliance with multilateral obligations by submitting its biennial notification on quantitative restrictions for 2024-26.

Indian also said that under Article XX (general exemptions) of the General Agreement on Tariffs and Trade, countries were allowed to adopt rules to protect human, animal or plant life, or for public interest, provided these rules were fair and not used to discriminate or block trade.

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Counterattack

At the WTO panel discussions, India also pushed back against the barriers it faces in foreign markets. New Delhi voiced concern over the European Union's deforestation-free commodities regulations, which could disrupt Indian shipments of coffee, leather and several agricultural goods. It also flagged the EU's carbon border adjustment mechanism, aka carbon tax, which is expected to raise costs for steel and aluminium exporters, as trade-restrictive. India has also joined wider deliberations on supply-chain resilience and the 'greening' of the harmonized system, showing its intent to influence discussions on environmental measures.

In addition, India raised the issues of Thailand's market access for agricultural commodities and food products, and market access issues faced by the pharma sector. All these issues will be discussed at a formal meeting of the committee on 15-16 October.

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