Global Economy Indian Economy
India has decided to raise its concerns over Argentina's recent import restrictions bilaterally, instead of joining hands with the US and European Union who have taken the country to the World Trade Organization.
The Indian government has asked the Indian embassy in Buenos Aires to set up a meeting soon with Argentine authorities. This will include discussions between senior commerce department officials and Argentina's ambassador in Delhi.
The import restrictions, imposed in the form of import licenses and extensive paper work, is so onerous that it has become almost impossible for exporters to send their shipments to the country.
India has refused to be part of a group of nations that strongly criticized Argentina's import restrictions at the WTO last month. The group, which includes the US, the EU, Japan and 10 other countries, has accused Argentina of tying up its imports in red tape.
Argentina applied the import restrictions in February in response to a sharp dip in its exportable surplus last year.
The government said that it did not want to embarrass the country by joining hands with main players of the developed world. But that does not mean that India is going to let the matter rest as it has huge implications over the future exports.
According to the Indian government, Argentina is an important destination especially for the Indian exporters who are looking at ways to diversify beyond the traditional markets of the EU and the US, in the backdrop of the uncertainty gripping the developed world.
The government is helping in the initiative by giving incentives under the 'focus market and focus product' schemes.
India's merchandise exports to Argentina were $400 million (about Rs 2,100 crore at current rates) in 2010-11. Although it was just 0.16% of the country's total exports in that year, it posted a jump of 47.5%.
But exporters are apprehensive of the fall in figures now because of the new import norms that are implemented. The reason being they are not able to ship consignments for which orders were placed earlier by Argentine importers, who are not able to obtain imported licences under the new rules.
This has come as a rude shock for exporters from a number of sectors such as commodities, handicraft, leather products and light engineering goods which were slowly and steadily establishing a foothold in the market.
However, the government, at present, is not looking at the WTO path at all to sort out the issue.