The exercise is intended to provide a measure of protection to the domestic industry.

The government has been adopting a "cautious" approach in regard to lifting of quantitative restrictions (QRs) on imports on grounds that the BoP position is not all that comfortable and that the restrictions have to be gradually phased out while keeping its commitment to the World Trade Organisation (WTO).

In March 1996, approximately 90-100 items, primarily of dual use and industrial raw materials, including items like corks, pilfer-proof caps etc were taken off the restricted list and added to the free list of imports.Additions were made to the items allowed to be imported through the special import licence (SIL) route. Roughly, 90-odd items were added to this list, including certainconsumer goods, bus tubes, off-the-road vehicle tubes etc.

Export, trading, star trading and super star trading houses were permitted to import these items. The SIL command a premium in the market to benefit these exporters.

In the amendments made to the exim policy on March 31, 1995, the SIL list was enlarged by addition of 75 items. The list was first expanded when the policy was modified on March 31, 1994.

In February 1997, free import of 69 more items figuring in the special import licence list was allowed. At the same time, 92 items were taken off the restricted list and shifted to the SIL list. No time-frame was set for replacing quantitative restrictions by price controls. It was however stated that the process would depend on the foreign exchange and trade position and would take into account the interest of the local industry.

Notwithstanding these changes, there are still more than 3,000 items under the restricted list of imports, while another 900 items are in the transferable SIL list inthe export-import policy.

Developed countries have been pressuring India to work out a plan for an early phase-out of quantitative restrictions on the above items.

After protracted negotiations, India has been able to reach an agreement on a six-year phase out programme with its largest trading partner, the European Union, besides Australia, and other countries.

Bilateral talks are on with the US to reach a settlement even as though a dispute settlement panel to resolve the issue has already been set up under the WTO aegis. The setting up of the panel was automatic as the US made the second request when the matter came up as scheduled at the dispute settlement board meeting of WTO in November last. It is stated that the first written submission to the US on the dispute will be filed before the panel in about four weeks' time after which India will have another two weeks to file its first reply.