Friday, September 12, 2003

Policies Programmes & Initiatives46. Urea is the only fertilizer which is under price, movement and distribution control and whose imports are made on Government account. The Quantitative Restrictions (QRs) on urea have to be lifted w.e.f. 1.4.2001. The freeing of QRs, including those on urea, is a commitment India has entered into in an Agreement with USA in December, 1999 following the ruling of the Dispute Settlement Body of the WTO that India’s QRs were not justified on balance of payments grounds. As urea is a controlled fertilizer, removal of QRs will have a major impact on the domestic industry. Another important issue relates to DAP which is a decontrolled fertilizer since 24.8.1992 and whose imports have been decanalized with effect from 17.9.1992. This fertilizer is freely importable and there are no quantitative restrictions on its imports but the country has also committed a bound rate of tariff of 5% on DAP. The indigenous producers of DAP are at a disadvantage as the raw materials/intermediates required for its production are not available in the country. Presently these are compensated by a higher rate of concession for indigenous DAP

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