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Business Environment

Notes
WTO negotiations have been facing a roadblock since December 2008, when Lamy made
a strong push for convening another ministerial in Geneva to finalize modalities for
agriculture and NAMA following the failure of talks at ministerial meeting in July last
year at Geneva. On December 6 last year, WTO brought out revised draft modalities for
agriculture and NAMA. As the texts are yet to be discussed at the WTO, the DG decided
against convening a ministerial. Lamy proposed resumption of negotiations early in
2009, using the revised draft as a starting point.
But the negotiations have not resumed since then. It was in this context that India took the
initiative to restart the process again. The Delhi meeting is the first occasion since July
2008 when the ministers representing practically all major blocs such as the group of 10
(G-10), G-33, G-20, NAMA 11, Least Developed Countries, Small and Vulnerable Economies,
African Group, Cotton 4 and others are participating.

The meeting is being attended by the ministers from the US, European Commission,
Brazil, South Africa and China among others.

Source: timesofindia.indiatimes.com

13.8 Impact of WTO on India

In the new WTO environment, the buzzwords would be efficiency and productivity. "Success
will lie with those who exhibit competitiveness in price and quality." P.K. Kaul , Former Indian
Ambassador to USA.
The Indian economy experienced a major transformation during the decade of the 1990s. Apart
from the impact of various unilateral economic reforms undertaken since 1991, the economy has
had to reorient itself to the changing multilateral trade discipline within the newly written
GATT/WTO framework. The unilateral trade policy measures have encompassed exchange-rate
policy, foreign investment, external borrowing, import licensing, custom tariffs and export
subsidies. The multilateral aspect of India's trade policy refers to India's WTO commitments
with regard to trade in goods and services, trade related investment measures, and intellectual
property rights.
The multilateral trade liberalisation under the auspices of the Uruguay Round Agreement and
the forthcoming WTO negotiations is aimed at reducing tariff and non-tariff barriers on
international trade.
India is a founding member of the GATT (1947) as well as of the WTO, which came into effect
from January 1, 1995. By virtue of its WTO membership, India automatically avails of Most
Favoured Nation Treatment (MFN) and National Treatment (NT) from all WTO members for its
exports and vice versa. Its participation in this increasingly rule-based system is aimed towards
ensuring more stability and predictability in its international trade.

The Uruguay Round resulted in increased tariff binding commitments by developing countries.
India bound 67% of its tariff lines compared to 6% prior to this round. The government has
simplified the tariff, eliminated quantitative restrictions on imports, and reduced export
restrictions. It plans to further simplify and reduce the tariff.
All agricultural tariff lines and nearly 62% of the tariff lines for industrial goods are now bound.
Ceiling bindings for industrial goods are generally at 40% ad valorem for finished goods and
25% on intermediate goods, machinery and equipment. The phased reduction to these bound
levels is to be achieved during the 10-year period commencing in 1995. Tariff rates on equipment
covered under the Information Technology Agreement are to be brought down to zero by 2005.

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