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India won’t consider EU’s demand on duty-free wheat import

Business Standard, India

India won’t consider EU’s demand on duty-free wheat import

26 June 2011

Press Trust of India / New Delhi - To protect farmers’ interests, India has made it clear to EU that duty-free imports of wheat, barley, lemons, apples, pears and meslin flour will not be allowed under the proposed free trade agreement (FTA).

"The EU has asked for duty elimination on wheat, barely, apple, pear, lemon and meslin flour. We have clearly explained to them that India cannot offer concessions on any of these products," a senior Agriculture Ministry official said.

At present, there is 100% import duty on wheat and meslin flour, 50% on apples, 40% on lemon and lime and 35% on pears.

"The elimination of import duty on commodities requested by the EU are sensitive to Indian economy and is likely to affect domestic farmers and prices," the official said.

Indian farmers producing apple, pear, lemon and lime will be exposed to risks with the entry of imported fruits from the European Union (EU) as the post-harvest technology in the country is not fully developed, the official added.

India is an important trade partner for the EU and is a growing global economic power. The EU and India hope to increase their trade in both goods and services through the proposed Free Trade Agreement (FTA). The sides launched the negotiations for FTA in 2007 and are on track for signing the agreement.

Barring wheat flour, India does not import wheat as the country’s production is in line with demand. It is estimated to harvest a bumper crop of 84.27 million tonnes in 2010-11.

In the wake of higher domestic wheat production, imported grain from the EU at zero duty is likely to disturb the domestic wheat market, said a Delhi-based industry body.

India has banned export of wheat since early 2007 to bolster domestic supplies and contain food inflation.

However, in the case of barely, the official said, "We have no real protective interest, but so does EU has no real gain to make as import of barely is already at zero duty."

At present, barley production in India is declining and a political call need to be taken on this issue, he added.