The US is ratcheting up pressure on Indian authorities in a
bid to eliminate a restrictive import regime on boric acid,
which it argues discriminates against foreign
India’s complex import regime on the material,
which has been active since 2006, was among key issues
discussed at the US-India Trade Policy Forum held in Delhi in
US deputy trade representative, ambassador Robert Holleyman,
said that the US had "made it clear to the Indian government
that elimination of trade barriers to the importation of
boric acid into India is a priority for immediate
"Indian business leaders and employers share this view and
understand the harmful effects of these barriers on their
operations," he added.
US House Majority Leader, Kevin McCarthy, added to the
pressure, describing the regime in an October letter to the
Indian ambassador, Navtej Singh Sarna, as "arbitrary" and "a
barrier to trade".
McCarthy went on to label the restrictions as "contrary to
prime minister Modi’s commitments to a global
trading system that is transparent, non-discriminatory and
Under India’s current system, Indian companies
looking to use boric acid produced abroad must undergo a
lengthy process of applying for a license, giving the
domestic boric acid producing industry an advantage over
competition from abroad.
The US has previously raised the issue with the World Trade
Anglo-Australian miner Rio Tinto Plc, which has produced
borates from its Boron open-pit mine in California, US since
1872 and currently supplies around 30% of the global refined
borates market, has been particularly vocal in opposing
"This is simply a discriminatory measure against imported
boric acid. There is no licensing regime for
domestically-produced boric acid and it only exists to protect
a domestic industry from competition," a Rio spokesman told
|Dumped on? India’s import restrictions
on boric acid have been described
as a "barrier to trade" by the US.
Boric acid trade imports to India were initially clamped down
on in 2006 by the then government on the basis that its use
in insecticides was harmful to humans.
The regulation introduced meant that all domestic
manufacturers were obliged to be registered (to date, however,
no one has registered to manufacture boric acid as an
It also meant any company wishing to import boric acid, for
whatever end use, had to have a permit from the Central
Insecticide Board, within the Ministry of Agriculture.
According to Kaliprasad Kallakuri, president of the India
Ceramic Glaze & Glass Frit Manufacturer’s
Association, whose members have been significantly impacted by
the regulation, the process is drawn out and bureaucratic.
To gain the permit, companies first have to submit
consumption data for the last three-to-five years, verified by
local authorities and receive a no objection certificate,
signed off by various government departments.
Gaining the permit takes six-to-eight weeks, with another
eight weeks for material delivery, meaning a total lead time of
over three months, said Kallakuri. Licenses have to be applied
for each calendar year, or whenever quotas are used up.
"We are a bunch of small and medium manufacturers. Not all of
us have the facility to do all these processes," Kallakuri
"If we only require a little quantity, we rely on traders,
but traders are not granted a permit, as the end use cannot be
verified (…) so small producers have to buy
Locally-produced material is both more expensive and of a
lower quality, which impacts the quality of the frits produced,
according to Kallakuri.
Kiran Ajmera, managing director of distributor Chemie
Alliance, said in a statement: "The current regulation is
highly discriminatory as it is only applied to imports, which
is intended to protect the interests of a handful of domestic
producers of boric acid at the expense of many more
manufacturing and trading companies."
Rio Tinto has made the same case. "Unfortunately, the
discriminatory licensing regime impacts numerous added value
manufacturers making their products in India because the
policy allows domestic producers to charge a higher price for
boric acid that is readily available without the uncertainty
and delay of a license requirement," the company spokesperson
Pushing for change
While there has been some hope among local buyers that the
Narendra Modi administration, which was elected in 2014, might
modify the restrictions, so far little progress has been
Local frit manufacturers are now making a two-pronged effort
to change the process. On one side they are lobbying the
authorities to make the process easier, calling for the
introduction of a one-off application process and the
electrification of the forms.
On the other they are challenging the government in the
courts, with an application currently before the High Court of
Gujarat to quash the whole system of permitting. The case
should come before a judge in the next three months.
"I am optimistic (…) ease of doing business is a very
important buzz word in India right now," said Kallakuri.
He went on to say that "if not a total quashing, a middle
ground would do, with less bureaucracy, less red tape".
US trade representatives however, are pushing for total
elimination of the regime, rather than its amendment or
relaxation, which has been attempted in the past.
Outside of insecticides and frits, boric acid is also used
in flame retardants, cosmetics and nutrition.
The Indian Agriculture Ministry could not be reached for