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ECONOMY: IMPORTS
INTERVIEW: MURASOLI MARAN
“There’s
Misinformation On Extent Of Imports”
An impulsive reformer, Union Commerce and
Industry Minister Murasoli Maran explains to Associate Editor Rohit
Saran why it’s better to underplay the open import regime. Excerpts
from an exclusive interview:
 Q.
Imports have been freed, but the safeguards you have announced neutralise
much of the gains of an open import regime.
A. I’m happy you feel so. I want demands for further opening
of imports to come from media, political parties and the people. At least
it satisfies a (protection) lobby.
Q. How real is the threat of an import deluge?
A. There is a lot of confusion and misinformation on the extent
of imports. We want to gather accurate information on the true extent
of imports. Only then can we take protective measures.
Q. Though official imports of consumer products
have been negligible in the past years, yet industry claims that a lot
is being smuggled in.
A. The only way to kill smuggling is to make it less profitable. Gold
is a good example. Gold smuggling into India has decreased sharply since
its import was liberalised.
Q. But the hike in tariffs and introduction
of the non-tariff protection measures will make smuggling lucrative.
A. Taxes on imports must match the taxes on domestically produced
goods. But as the finance minister has said, in two or three years, our
customs duty must come down to levels prevailing in east Asian countries.
Q. You have made it obligatory for all pre-packaged
imported products to carry a maximum retail price. Given the fluctuation
in the forex rate and variations in local taxes how will this be implemented?
A. Most countries have this provision. Importers will have to implement
it. It will benefit the consumers.
Q. The end of QRS makes SSI reservation redundant.
The country can import products that it can’t produce in large factories.
A. I agree it is an anomaly. Many
products reserved for the SSI are not even being produced by them. Besides,
we can’t compete with China in many products because it makes them
on a very large scale. But removing ssi reservation does not mean killing
SSIs. After all they account for 40 per cent of our exports.
Q. Now that imports have
been freed, do we need an annual exim policy?
A. Indian exports suffer from many supply constraints. According to
a World Bank study Indian exports have a competitive costs disadvantage
of $80 per container. Only 7 per cent of our exports are shipped to their
ultimate destinations from Indian ports. The cost of capital in India
is very high. To remove such constraints we need an annual policy.
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