Under a fully WTO-compatible trade regime, to which India is committed, the only weapon available in normal circumstances to check imports which damage domestic industry is flexibility in fixation of customs duties subject to the committed bound rates. But as imports under the export-linked schemes are duty-free, a surge in such imports cannot be arrested through the tariff rate mechanism. It is necessary, therefore, to rationalise the duty exemption and remission schemes in the EXIM Policy 2002-07 to be announced shortly.
