"It is necessary to clearly define the scope of article XVIII-B (on quantitative import restrictions) and to lay down guidelines for ensuring that development dimension is fully taken into account while assessing foreign exchange reserves," it said in a discussion paper for the next year-end WTO ministerial meeting. Article XVIII of General Agreement on Trade and Tariff (GATT) allowed developing nations to impose quantitative restrictions on imports on balance of payment (BoP) grounds, taking into account the foreign exchange position and development needs of the country.

But assessment of foreign exchange reserves was made exclusively on the basis of comparison of volume of reserves with value of imports for a specified period, it said. "The development dimension is ignored. Thus,in practice, there is no distinction between article XII (dealing with import curbs maintained by developed nations for BoP reasons) and Article XVIII-B, which provides a special dispensation for developing countries," it said.

The paper said "a differential has to be clearly built into the provision so that Article XVIII-B serves its purpose in ensuring long-term stability of the BoP position of developing countries, without making them vulnerable to violent fluctuations in reserves and exchange rates, which can lead to severe and sustained setbacks in the growth process."

India's demand, made at the recent Group of 15 (G-15) developing nations two-day symposium last week, assumes significance in the wake of India being forced to accept a six year phase out period to remove curbs imposed by it on imports from developed nations.

New Delhi also pointed out that the anti-dumping measures were being virtually used as weapons to deny access to some products of developing countries. The dispute settlementpanel of WTO has also asked India and the US to work out a mutually acceptable timeframe for removal of quantitative restrictions on India's import. In an indirect reference to frequent anti-dumping proceedings initiated by the European Commission on unbleached cotton grey fabrics imports from India, it said such actions had created instability and unpredictability in the market. India said dumping margins should be doubled from the present stipulations for developing nations and industrialised nations should meet the costs incurred by the third world in defending interests of their exporters.

It also said various provisions on agreement on subsidies and countervailing measures should be altered in the interest of developing nations.