India and wto

India and the World Trade Organization – An Overview of All Related Concepts and Issues

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An important topic for the civil services examination is India’s participation in various international organisations. An extremely significant intergovernmental organisation that deals with worldwide trade and business is the World Trade Organization (WTO).

Let’s dig deeper into India and WTO relations over the years and learn about various agreements signed as part of the WTO.

India and WTO

India has been a member of both the World Trade Organization (WTO) and its predecessor, the General Agreement on Tariffs and Trade (GATT), since July 1948. India has participated actively in the WTO’s proceedings as a developing nation, particularly by raising the concerns of the entire developing world as well as its own.

India became the most ardent supporter of the developing bloc during the Doha WTO meeting in 2001. Since the representatives of 142 nations agreed to a new round of trade negotiations covering subjects like the environment, competitiveness, and investment, the summit was deemed a success.

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

India and wto
India and wto Image credit: wto.org

Reduction of Tariff and Non-Tariff Barriers

The agreement calls for a general decrease in tariffs on manufactured goods as well as the gradual elimination of quantitative limits. The crucial consequence is that businesses with a competitive advantage would be able to endure throughout time.

Trade-Related Investment Measures (TRIMS)

This agreement prohibits the host nation from favouring domestic investment over foreign investment, i.e., it mandates that governments must openly permit investment.

Trade-Related Intellectual Property Rights (TRIPS)

Intellectual property rights aim to defend and give the inventor of an intangible illicit use of his legal creation recognition. Patents, copyrights, geographical indications, trademarks, industrial circuits, designs, and trade secrets all fall under this category. Since the laws controlling these matters differ greatly between nations, the agreement mandates a fundamental homogeneity of the law to ensure that no rights are violated. 

This necessitated significant modifications to native legal systems, particularly those in India. India, as a result, changed the Trade and Merchandise Act, the Patents Act, and the Copyright Act. The biotechnology and pharmaceutical sectors are anticipated to be severely damaged. The transfer of technology from abroad is anticipated to have an additional effect on India.

Agreement on Agriculture (AOA)

With this agreement, market access is increased, while export subsidies and government subsidies for agricultural products are decreased.

Agreement on Sanitary and Phyto-sanitary measures (SPM)

This relates to limiting exports from any nation that does not adhere to the global standards for bacteria, germs, etc. This has a special connection to sectors including marine food, food processing, and other packaged food.

Multi-Fibre Agreement (MFA)

This agreement is no longer in effect. It was only good till 2004. It had essentially set export quotas for textiles and apparel from developing to industrialised nations. This was in place in the industrialised nations, such as the USA and the EU, to safeguard their own domestic producers. The demise of this accord has provided emerging countries like India with a significant opportunity. India needs to be ready in terms of standardisation, modernisation, customisation, and cost-efficiency to meet the demands of global clients in order to seize this opportunity.

India and the World Trade Organization – Latest Developments and Issues

There have been four significant recent events involving India and the WTO (WTO). These 4 are the Ban on Chinese Mobile Apps, Issues related to the Peace Clause, Fisheries Subsidies and Information and Communication Technology (ICT) Tariff Case.

There are issues like the Invoking of Peace Clause, Agreement on Countervailing Duties, Anti-dumping Duties, etc., which affect India.

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