Government may challenge World Trade Organization’s order to lift ban on US poultry imports

Talks with stakeholders continue on ways to protect growing domestic poultry industry from inflow of US chicken legs, which are cheaper by about Rs 100/kg

NEW DELHI: Competitively priced American frozen chicken legs may take longer to hit the Indian market as the government is set to challenge the World Trade Organization's October order asking it to lift a ban on poultry imports from the US.

Simultaneously, the government is brainstorming with stakeholders on ways to protect the growing domestic poultry industry from the inflow of US chicken legs, which are cheaper by about Rs 100 per kg. India banned US poultry imports on account of avian influenza in 2007, a decision the WTO called 'unscientific' in its judgment.

"We are ready with our argument and will be filing an appeal in a day or two to the appellate body. We are expecting an improvement in the dispute settlement panel decision, which will help us in future," a government official said. "We are committed to protect the industry with huge employment potential and are looking at various measures to that effect. We have had a meeting with the poultry industry and breeders."

India is the fourth-largest producer of chicken in the world, after the US, China and Brazil, with an annual production of 3.5-4 million tonnes.

Last week, China banned the import of US poultry and eggs after the detection of an avian flu strain in the Pacific Northwest. More than 20 countries, including members of the EU, South Korea and South Africa, have imposed curbs on poultry from certain US states or the entire country.

With US consumers preferring chicken breasts, the less-favoured chicken legs are frozen for export to other markets at highly competitive prices. "As Russia has also banned American poultry, they are really eyeing the Indian market to sell chicken legs frozen for the last four-five years at may be Rs 40-50 a kg compared to Rs 160 -170 a kg price prevailing in India," said another official privy to the matter.

The department of commerce called a meeting that was attended by representatives of the All India Poultry Breeders' Association and others to suggest ways to protect the domestic industry and assess the grounds on which other countries have banned US poultry. But as per WTO rules, national treatment must be accorded, which means the domestic industry must be subjected to the same rules as the foreign seller.

Given that the US will export chicken legs that are four to five years old, India could restrict imports to products that are not more than six months old, said a poultry expert. "For this, FSSAI (Food Safety and Standards Authority of India) can come out with standards," he said. According to experts, India could also look at options such as anti-dumping duties to curb imports and use the argument that the chicken are fed with genetically modified food.

"US chicken is given genetically modified feed, which is not allowed in India. They are also injected with a lot of hormones," said an expert who asked not to be identified.The EU banned US chicken on account of chlorine treatment. An anti-dumping case could be possible but difficult."

If India files an anti-dumping case, it will have to allow US chicken for a year to assess the dumping margin or else dumping analysis can be done by apprehending the price at which US sells to different markets, which will be difficult," said the expert.