A Decade of Economic Reforms - Review by RBI
[Source: RBI Report on Currency and Finance 2001-2002 dated March 31, 2003]

Module: 5 - External Sector

Trade Reforms - India and the World Trade Organisation

India is one of the founding members of the GATT (1947) and the WTO (1995) and favours the multilateral approach to trade relations. India grants Most Favoured Nation (MFN) treatment to all its trading partners. As a member of the WTO, India is committed to ensure that the sectors in which developing countries enjoy a comparative advantage are adequately opened up to international trade. India is also committed to ensure that the Special and Differential Treatment Provisions for developing countries under different WTO Agreements are translated into specific enforceable dispensations. Notwithstanding its commitments, India has maintained that the multilateral system would gain even more if it adequately reflected the concerns of the developing countries. At the Fourth Ministerial Conference at Doha in 2001 India forcefully presented her concerns, which are reflected in the Doha Declaration. On the four "Singapore Issues", viz., trade and investment, trade and competition, transparency in Government procurement and trade facilitation, raised at the first Ministerial held in Singapore in 1996, no decision was reached either at this Ministerial or the subsequent two Ministerials held in Geneva and Seattle. However, Working Groups were established to examine each of these four issues in detail. The Doha Declaration states that the study process on these issues would continue until the fifth Ministerial Conference to be held in Mexico and decision regarding any negotiation would be based on explicit consensus. On issues of crucial relevance to India, the Declaration reaffirms that the International Labour Organisation (ILO) is the appropriate forum to address the core labour standards.

India’s current status and views regarding various issues as outlined in the latest Trade Policy Review conducted by the WTO are set out below:

The post-Uruguay Round experience has been a mixed one for agricultural trade in India. In the ongoing negotiations on the Agreement on Agriculture, India submitted detailed proposals with a view to safeguarding the food and livelihood security of the large subsistence level farming community and maximising export opportunities for Indian agricultural products by seeking a reduction in the high tariffs and subsidies prevalent in developed countries.

India is a signatory to the Agreement on Technical Barriers to Trade and the Agreement on Sanitary and Phytosanitary measures and there is a greater emphasis on bringing Indian standards to international levels. Most standards in India are voluntary although health and safety regulations are mandatory for several products. 133 products are under compulsory Bureau of Indian Standards (BIS) certification for domestic goods through various Quality Control Orders issued by various Ministries/Departments.

India is concerned with the developed countries outnumbering the developing countries in the deliberations, resulting at times in international standards development not conducive to their implementation by the developing countries. Given the lack of access to technologies developed abroad for achieving standards acceptable to importing countries, India feels that specific measures need to be taken by developed country Members to give effect to the clauses extending "Special and Differential treatment" to developing countries in the implementation of these WTO Agreements.

Consequent to India’s obligations under the TRIPS Agreement, appropriate and necessary changes have been identified and enacted in almost all cases in legislations relating to protection of Intellectual Property Rights (IPRs). In addition India has enacted sui generis legislations in some TRIPS related areas. For the protection of Geographical Indications of Goods, a sui generis legislation, viz., the Geographical Indications of Goods (Registration & Protection) Act, 1999 has been enacted in order to comply with the requirements under the TRIPS Agreement and to protect products of Indian origin as well.

The Indian Parliament has passed the Protection of Plant Varieties and Farmers’ Rights Act with the objective of giving a significant thrust to agricultural growth by providing an effective system for the protection of plant varieties and farmers’ rights. This is expected to stimulate investments for research and development both in the public and the private sectors for the development of new plant varieties by ensuring appropriate returns on such investment.

India provides for the protection and enforcement of different fields of intellectual property through both specific national legislation as well as the Code of Civil Procedure and the Code of Criminal Procedure by way of civil remedies and criminal penalties. These provide effective deterrent to the infringement of IPRs. The criminal cases and civil suits for the infringement of IPRs lie in the judicial system for other cases.

India recognises the importance of the services sector to the economy for higher growth. Hence, the Government’s increased emphasis for efficient performance of the services sector particularly, the infrastructure services, such as telecommunications, banking, insurance, shipping, roads, ports, and air transport. India actively participated in the Uruguay Round Services Negotiations and made commitments in 33 sub-sectors as compared to an average of 23 for developing countries and has accepted enhanced commitments as well. The commitments undertaken have been implemented and in some sectors, like telecommunication, have been fulfilled even before the scheduled date.

While GATS recognises "movement of natural persons" as one of the modes of supply of services, the commitments undertaken by the developed countries have very little to offer to the developing countries in terms of opening their markets. The Agreement enjoins the developed countries to take concrete measures aimed at strengthening the domestic service sector of developing countries and providing effective market access in sectors and modes of supply of export interest to developing countries. However, the GATS objectives of increased participation of developing countries in trade in services has hardly been addressed. Therefore, in order to achieve the required balance in GATS and to increase the participation of developing countries in trade in services as per Article IV of GATS, the developed countries should undertake a higher level of commitments in Mode 4, i.e., movement of natural persons and in sectors of export interest to the developing countries.

[Source : World Trade Organisation: Report on India’s Trade Policy Review, May 2002.]

Regional Trade Agreements