The Indian poultry industry is likely to face competition from cheap chicken leg imports from the US which could soon flood the domestic market if New Delhi is not able to come up with fresh reasons why poultry from the world’s largest producer should not be allowed.

The World Trade Organisation’s (WTO) Appellate Body (top decision making body) on Thursday ruled that India’s ban on US poultry items on the ground of checking spread of avian influenza was not based on science and has to be scrapped.

“India has up to 18 months to implement the decision after which one could expect chicken legs from the US, priced much lower than the ones available locally, to take over the domestic market,” a Government official told BusinessLine.

However, if India is able to put in place fresh restrictions that could better withstand scientific scrutiny, the situation could be saved, he said.

The Commerce Ministry has asked poultry associations to examine the feasibility of restrictions such as banning of chicken which are fed genetically modified food or ones that are kept frozen for long periods.

But before new restrictions are introduced, India has to be sure about two things: “Any new restriction should have scientific validity. Moreover, it should be such that the domestic industry should not have any issues implementing it as these would apply on all poultry,” the official said.

Following complaints from the US, a WTO panel had ruled last year that that India’s ban on US poultry product imports flouted global norms. India appealed against the verdict in January this year.

After hearing India’s appeal, the WTO Appellate Body upheld the panel’s findings that India’s avian influenza measures were neither ‘based on’, nor ‘conformed to’, the relevant international standards.

India’s over four lakh poultry farmers – who produce an estimated 3.5 million tonne every year – could lose up to 40 per cent of their domestic market once US products start flowing in, according to industry estimates.

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