Recently, India utilized the Agreement on Import Licensing Procedures (ILP) under the World Trade Organization (WTO) to limit imports of personal computers, laptops, and tablets. The new regulations mandate companies to obtain licenses from the Directorate General of Foreign Trade (DGFT) to import.
- Three years before, on June 12, 2020, India had utilized the same agreement to impose restrictions on imports of pneumatic tires used for cars, buses, lorries, scooters, and motorcycles.
About Agreement on Import Licensing Procedures (ILP)
- During the Uruguay Round, the ILP Agreement was incorporated in the Marrakesh Agreement Establishing the World Trade Organization and it became binding upon all WTO members.
- The Agreement on Import Licensing Procedures says import licensing should be simple, transparent and predictable so as not to become an obstacle to trade.
- For example, the agreement requires governments to publish sufficient information for traders to know how and why the licences are granted.
- These procedures are among the non-tariff measures (NTMs) most widely used by governments in international trade policy.
- The main objective of the ILP Agreement is to simplify and bring transparency to import licensing procedures.
- It recognizes the usefulness of import licensing for certain purposes, including to administer some measures adopted pursuant to the relevant provisions of GATT 1994 but, at the same time, that the flow of international trade should not be impeded by the inappropriate use of import licensing procedures.
- It also strives to ensure that the administration of procedures is applied in a fair and equitable manner and do not have a restrictive or distortive effect on imports.
