Pakistan Rice Exporters Propose Countervailing Duty on Rice Imports from India

Thursday, 13/12/2012, 09:51 GMT+7

While welcoming the government decision to liberalize trade with India, the Rice Exporters Association of Pakistan (REAP) has urged the government to impose a countervailing duty on rice imports from India to offset subsidies in the rice sector by the Indian government.

The REAP vice-chairman said that awarding the Most Favored Nation (MFN) status to India would allow trade of agriculture items via land border and boost income of rice exporters. He said that the move will help Pakistan’s earnings from rice exports to increase to $3 billion annually, up about 33% from the current $2 billion as Pakistan could re-export high-quality rice from India with value addition.

However, the REAP vice-chairman warned that unrestricted bilateral rice trade with India will hurt the local rice sector as the Indian agriculture sector is heavily subsidized, and matching such subsidies in Pakistan is not possible. According to Pakistan sources, India spends about $66 billion per year on agriculture subsidies, while the total GDP of Pakistan is $210 billion.

The REAP VC has warned that the association may file a case with the National Tariff Commission (NTC) to safeguard the interests of the farmers if the government does not levy countervailing duties on rice imports from India. However, REAP is seeking an exemption of such countervailing duties on rice imports from India meant for re-export so that Pakistan rice exporters remain competitive in the international market.

India had awarded the MFN status to Pakistan in 1995, and Pakistan is likely to reciprocate by this year-end under World Trade Organization (WTO) obligations. This would allow India to export several items, including rice, to Pakistan that are now restricted.

Read related Oryza story:

Pakistan Basmati Rice Growers Association Opposes Rice Trade with India

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