The whole QR thing in its present avatar began when the WTO Committee on Balance of Payments Restrictions and the International Monetary Fund declared that India no longer needed to restrict imports on the ground of the fragility of its balance of payments. India disagreed, and the argument with its trading partners dragged on till a bunch of them including, most importantly, the European Union and the United States, became party - most as observers, the US as plaintiff - to a challenge in the WTO to Indian QRs, maintained on BoP grounds.The government wanted to buy time by dragging out the WTO legal process.

Very likely it also imagined it could sit on $30bn in foreign reserves and still argue they were precarious. So it resisted the inevitable until light belatedly dawned. After many twists and turns, in 1997 India struck a deal with all major trading partners except the US. This stipulated a phased removal of QRs, to be completed by April 2003. Given the WTO's most-favoured nation (MFN) principle, whereby trading concessions to one partner must be extended to all members, this deal would have had to be extended to the USA and all others.

The government's exaggerated caution on this political landmine was brought into focus in an amusing example. When the deal with the EU and others was struck, the European Commission office in New Delhi deliberately downplayed the importance of the consumer goods imports that were to be opened up early under this deal. The Australian High Commission, however, never too bothered with Indian sensibilities, went to town with a press release detailing all the important imports to be immediately opened up along with their timetable and the value of this trade. The Indian government went ballistic. This columnist recalls a chuckling diplomatic source telling her, "You should have seen the firing the Australians got!" The dressing was apparently of the same order as the persona-non-grata treatment meted out to Australian diplomats in the wake of their rabid reaction to India's nuclear tests.

Anyway, the US was not buying this deal. Part of the story of India's failure to work out a mutually acceptable deal with Washington was that, alongside demanding an earlier QRs phaseout, the US was insisting that New Delhi should bind (put a ceiling on) tariff rates in the WTO for the imports yet to be opened up at far lower rates than it was willing to do.

India lost the WTO case to the US and appealed. The Appellate Body gave an interesting ruling: QRs on BoP grounds were illegal; however, a developing country like India may require more than the time generally allowed for implementing a WTO ruling, and the exact timeframe for phasing out QRs was to be worked out between India and the US. India finally struck a deal with the US on phasing out QRs by April 2001, two years earlier than agreed with the EU and others. This will apply to all India's trading partners.

Consider the veritable arsenal of weapons with which the government is arming itself to protect industry. It has managed to bind agricultural tariffs in the WTO at rates of 150 and 300 per cent, and threatens to make these the applied rates on several to-be-opened imports. It plans high tariff protection to auto imports and will probably use environmental concerns to restrict the age of imported vehicles. It is prepared not just to apply safeguard duties over and above bound rates, if need be, but also to reimpose QRs if "necessary". It has merrily used - and abused - the anti-dumping mechanism to restrict imports in recent years.

Note also that QRs will likely remain on some 500 items. Now thereby hangs a tale. When QRs on BoP grounds were challenged in the WTO, the government quickly shifted QRs on some 600 items to a category of imports restricted on grounds of plant and human health, environmental safety and national-security considerations (allowed under Articles XX-XXI of the Gatt agreement). Of course the idea was to defeat the challenge to these QRs on BoP grounds. The EU promptly protested: the government is obviously hoping to get away with these regardless. Who knows but that there may be a quid pro quo elsewhere to keep the EU quiet.

The point is that the government has done everything in its power to help an undeserving bunch of producers, and dragged the process out for half a decade. Let us hear from this lot how it has used this time to prepare for a QRs-free India except whine on about threats, real or imagined.