Rio intensifies protest over Indian boric acid import restrictions

By Myles McCormick
Published: Monday, 25 January 2016

Miner argues Indian customers disadvantaged; quibbles over ambiguity of dual classification.

Anglo-Australian mining giant Rio Tinto Plc has urged the Indian government to remove import restrictions on boric acid, which it said would relieve domestic industries currently forced pay over the odds for domestically-produced product.

In a letter seen by IM from Vijay Ayer, managing director of Rio Tinto India, sent in December to India’s Secretary of Agriculture and Cooperation, Shri Siraj Hussein, Rio reiterated a request that the department remove the "discriminatory licencing regime" imposed by the Central Insecticide Board (CIB) on the import of boric acid.

Rio, which produces borate products through its Borax mine in California, US, maintains that the existing import restrictions are causing Indian industries that purchase boric acid to pay a 20-30% premium on domestic product because it is not subject to the licencing restrictions placed on imports.

The letter was sent following a meeting between Ayer and Hussein in mid-November to discuss the issue.

In it, Rio pointed to the fact that boric acid is subject to a dual classification under India’s Import Tariff Classification (ITC-HS). Under one section of the ITC, it is considered "freely importable", while under another it is defined as an insecticide and subject to various restrictions under the Insecticides Act 1968.

As such, all imports of boric acid, regardless of end use, require the importer to be registered and seek a specific licence for shipments.

This creates a "marketing advantage for domestically produced boric acid in that it can be delivered to customers 'on demand’", Rio said.

"Repealing the import restrictions will lower the cost of boric acid to Indian manufacturers, increase the competitiveness of a broad cross section of domestic industries and therefore, serves India’s national interest," Ayer wrote.

Rio dismissed efforts that have been made by the CIB to expedite the licencing process, maintaining that "even if the regime is somewhat faster [it still] provides an unfair trading advantage to [domestic boric acid producers]".

It also rejected the mooted justification for the policy on health and safety grounds: "If the CIB has determined that boric acid needs to be controlled for its use as an insecticide in India, it should apply any restrictions on certain substances without regard to whether the product is imported or domestically produced."

The US – which exported 215,000 tonnes boric acid worldwide last year, according to figures from the US Geological Survey (USGS) – raised a complaint with the World Trade Organization (WTO) on the issue in October 2015.

Boric acid is derived from boron, which in turn is extracted from borate minerals such as borax and colemanite. It is widely used in insecticides, flame retardants, construction chemicals and the steel industry.