Topresent the context of the relationship of India with WTO it could be said thatIndia has been a founding member of the WTO when it was started long way backin 1970 s and besides this fact India has always been in favour of multilateraltrading with the other countries of the world. In order to achieve the gainsfrom WTO the government of India has announced the Export-Import policy1992-1997 to liberalize trade and boost domestic manufacturing sector. Theministry of commerce of the Government of India expects that by WTO India wouldbenefit by creating 10 million additional jobs annually and India’s marketshare in world exports would improve.So what is actually WTO and itsrelevant policies?The World Trade Organization abbreviated as WTO isan organization which is managed by the collaborative efforts of differentgovernments that regulates international trade.
The WTO was officiallyestablished on 1 January 1995 under the Marrakesh Agreement, signed by acommunity of 123 nations on 15 April 1994. It is enumerated amongst the largestinternational economic organization in the world and also WTO deals withregulation of trade in goods, services and intellectual property between theparticipating countries by providing them with a sound framework fornegotiating the trade agreements and a dispute resolution process aimed atenforcing participants’ adherence to WTO agreements, which are signed byrepresentatives of the member governments and verified properly by their parliaments.Most of the issues that the WTO focuses on derive from previous tradenegotiations, revolving around the Uruguay Round held from the span of 1986 to1994. The WTO has many roles to perform under differentcircumstances. A global system of trade rules are very well operated by thisbody and it even acts as a forum for negotiating trade agreements, it settlesvarious trade disputes between its members and it supports the needs ofdeveloping countries.
The consequence is that, the number of free tradeagreements between governments of the different nations from both the ends haveincreased substantially. During July 2012, many negotiation groups in the WTOsystem for the current agricultural trade negotiation which is in the conditionof a halt or no progress. With the advent ofadvanced technology, would be obtained at low cost and besides this because ofwide arrangement for resolving trade disputes under WTO, India would be in abetter position to get quick redressal of the trade disputes, if they exist.The scope of creating more job would be expanded. The Indian exporters havedeficient market information, this can be removed by the help of WTO andcountry can get wider market information, and eventually due to increasing competitionand exposure the competitive edge and productivity of Indian industry willimprove.
The most significantdecisions are made either by the respected ministers who have a meeting scheduleof meeting once in two years or by theirambassadors or delegates who have a regular meetings in the city of Geneva A number of simple, fundamental principlesform the foundation of the multilateral trading system. The primary purpose ofthe WTO is to open trade for the benefit of all.AFederation of Indian Chamber of Commerce and Industry (FICCI) Task Force reports(March 1996) on WTO, rightly observed that in changing scenario there is noalternative to Indian industry but to gear up itself to raise the efficiencyand competitiveness, so that India is able to meet the competition in both, thedomestic and external markets. By, this, under certain areas like agriculturaland allied exports, textiles and trade in services India can meet not only thechallenges and will be able to exploit opportunities successfully whendeveloped countries will co-operate to share the fruits of growth and opennessin the new world trade order. Themain perspectives based on which the Indian economy has been affected by theWTO policy rests on the fact that there will be a reduction in the subsidies toIndian trade along with a slight increase in the India’s share of agriculturalearnings in the near future. In addition to the above mentioned points the WTOpolicy has also provoked multilateral trade relations between India and theother countries of the world globally. The Tariff lines and the quantitativerestrictions have also been increased and bound by means of this WTO policy. About67 per cent of its tariff lines were bound.
For non-agriculture goods, with afew exceptions ceiling bindings of 40 per cent and 25 per cent on intermediategoods have been undertaken. The phase of reduction is extended to the year,2005.The most significant impact of the WTO policy in the Indian financial systemcomprises mainly of the following points: 1) Severe impact on IndianAgriculture: This sector has been the most drasticallyaffected by the advent of the WTO policy on the Indian financial system. Thereare several sectors of the Indian agriculture which have been significantlyimpacted by this policy. These sectors could be listed as below:a) Imposition of ImportDuties. There were many commodities which wereexempted from this import duty including fishery forestry rubber and manyothers were also a part of it whereas all the other commodities are a part ofit. b) Economic Support. This can be further classified as Amber Box SubsidiesBlue Box Subsidies and Green Box Subsidies.
They play a very important role insecuring the rights of the farmers and helping them in every possible way. Inaddition to the above mentioned subsidies there are product and non-productsubsidies as well which lead to the overall development of the economy and thecountry of course. c) ExportSubsidies They havehampered the overall progress of the nation as the agricultural exports do notreceive any subsidies in the country but if they do then the overall problemshall be solved to a great extent by the economy of the country. The governmentof the country could provide incentives to agricultural items for exports. Inaddition to the above mentioned points, the other countries give ahuge and great amount of subsidies for export of agricultural commodities.
TheEU (UK, France, Germany etc.) countries give an average 265 per cent of exportsubsidy, Brazil 60 per cent. Thailand 40 per cent, Pakistan 30 per cent thishas created a critical situation in the agricultural economy of India. Besides,imposition of import duties is neglected, QRs have been withdrawn, no directexport subsidy is given to the exporters of agricultural commodities. On thisbackground India has to oppose such hike in export subsidies in the forthcomingAgricultural Round.
Concurrently, some amount of export subsidies has to bedesignated to some important agricultural commodities. Thegraph below shows a pictorial representation of how the agricultural productshave been impacted by the advent of the WTO policy.