India in the WTO

India and her role in various international organisations is an important topic for the civil services exam. The World Trade Organisation (WTO) is a very important intergovernmental organisation that deals with international trade and commerce. India in the WTO is an important topic for UPSC economy segment.

India and WTO

India has been a member of the WTO since January 1995 and also had been a member of the WTO’s forerunner General Agreement on Tariffs and Trade (GATT) since July 1948. As a developing country, India has played a significant role in the proceedings of the WTO, especially in voicing its own concerns and also of the entire developing world.

In the Doha WTO conference that took place in 2001, India emerged as the most outspoken of advocates for the developing bloc. The meeting was declared a success since the delegates of a 142 countries agreed to a new round of trade talks, including topics such as environment, competition and investment.

There are many implications for the Indian economy as a result of the many agreements signed as part of the WTO. They are discussed below:

Reduction of Tariff and Non-Tariff Barriers

The agreement proposes an overall reduction of tariffs on manufactured products and the phasing out of the quantitative restrictions over a period of time. The important implication is that the firms that have competitive advantage would be able to survive in the long run.

Trade Related Investment Measures (TRIMS)

This agreement forbids the host country to discriminate against investments from abroad vis-a-vis domestic investment i.e. agreement requires investment to be freely allowed by nations.

Trade Related Intellectual Property Rights (TRIPS)

Intellectual property rights seek to protect and provide legal recognition to the creator of the intangible illegal use of his creation. It includes patents, copyrights, geographical indications, trademarks, industrial circuits, designs and trade secrets. Since the law governing these aspects vary vastly across countries, the agreement stipulates a basic homogeneity of law so that no infringement of rights occurred. This required some changes in the domestic laws of countries including India. As a result, India amended the Copyright Act, the Patents Act, and the Trade and Merchandise Act. The pharmaceutical and biotechnology industries are expected to be hit the hardest. Another impact on India is expected to be in the transfer of technology from abroad.

Agreement on Agriculture (AOA)

This agreement deals with giving market access, reducing export subsidies and government subsidies on agricultural products.

Agreement on Sanitary and psyto-sanitary measures (SPM)

This deals with restricting exports of any country that do not comply with the international standards of germs/bacteria, etc. This is particularly related to industries such as marine food, food processing and other packed food.

Multi-Fiber Agreement (MFA)

This agreement is no longer applied. It was valid till 2004 only. It had essentially placed quotas on the amount of textile and clothing exports from developing to developed countries. The developed countries, including the USA and the EU had this in place to protect their own domestic producers. As a result of this agreement being dismantled, a huge opportunity has opened up for developing nations such as India. To take advantage of this opportunity, India should have preparedness in terms of standardisation, modernisation, customisation and cost efficiency to satisfy the demands of foreign customers.

There are other issues also like the Agreement on Countervailing Duties, Anti-dumping Duties, etc. which affect India.

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