INDIA COMMENDED FOR ECONOMIC PERFORMANCE AND
REFORM PROCESS - WTO's TRADE POLICY REVIEW OF INDIA
India's trade policy review by the World Trade
Organisation (WTO) concluded successfully today after the Indian
delegation effectively responded to all the various issues raised
at the meeting of the Trade Policy Review Body which was held
in Geneva on 19 and 21 June 2002. The Indian delegation to the
meeting was led by the Commerce Secretary Shri Dipak Chatterjee.
Such trade policy reviews of India are held every four years,
the last one having been held in 1998.
In his opening statement at the Review on 19
June 2002, Shri Chatterjee presented a comprehensive account of
the various economic and trade related reform measures undertaken
by the Government during the last four years. He highlighted in
particular the initiatives taken like removal of quantitative
restrictions, lowering of customs duties, de-regulation in a number
of service sectors like banking, insurance and telecom and the
liberalisation of the Foreign Direct Investment regime to a significant
extent.
The Commerce Secretary also dwelt at length on
the second generation of economic reforms underway in specific
sectors and at the State level. He also explained the various
steps and strategies being adopted for achieving the projected
share of 1% of international trade by 2006-07.
During the review, which attracted a high level
of participation and interest, the WTO members commended India
for its strong economic performance over the past decade with
growth at an average of 6% a year and a reduction in poverty.
They noted that this resulted, in great part, from continued economic
reform, including trade liberalisation, lower government involvement
in economy and liberalisation of key services sectors. They further
noted that trade reforms had concentrated on tariff reforms and
the removal of quantitative restrictions on imports. The issues
raised regarding the number of exemptions for customs duties as
well as about the role of additional duties and special additional
duties were clarified by the Indian delegation.
Some delegations expressed concern about India's
increased use of anti-dumping measures. Certain concerns were
also raised regarding the labelling, certification and standards
requirements as well as about certain procedures. In its response,
the Indian delegation conveyed that at a time when India was going
through a process of economic reform and liberalisation, such
moves will be meaningful only if there was fair trade and a level
playing field for the domestic industry. It was made clear that
the anti-dumping investigations were being conducted strictly
on the basis of anti-dumping rules which were fully in accordance
with the WTO Agreement on Anti-Dumping. A point was also made
that the actual trade affected by these measures were not significant
in that all the 39 measures against EC and US, for instance, altogether
accounted for less than 0.1% of all of India's total imports.
Similarly, it was also clarified that all the requirements of
labelling, standards, etc. on imported products were already applicable
on like domestic products.
The WTO members showed recognition to the importance
of the agricultural sector in India. Some concerns were however
expressed over the subsidies, the large grain stocks, etc. India
pointed to the various measures that have been undertaken including
the removal of export restrictions on agricultural products and
the move towards allowing freer inter-State movement of food grains.
It was also pointed out that further liberalisation would also
depend on how the trading partners committed themselves to reduction
export subsidies and domestic support.
In respect of textiles, certain delegations pointed
to the high tariff and small scale sector reservations. Here again,
several recent initiatives regarding de-reservation of readymade
garments both in the woven and knitwear segments, continuous modernisation
and technological upgradation were referred to by the Indian Delegation.
The limitation on market access resulting from slower phase out
of quota restrictions, tariff peaks in developed markets for quota
items and repeated trade defence actions were pointed out by the
Indian Delegation.
India was also commended for its efforts to enforce
protection of Intellectual Property Rights both through the adoption
of new legislation and through educational awareness campaign.
Some members, however, pointed to further efforts in this regard
especially in view of India's need to attract more FDI.
In respect of services sectors, it was recognised
that significant progress had been made in reforms in the telecommunications,
banking and insurance sectors. There were also remarks pointing
to the success of India's software sector as being indicative
of its ability to compete globally.
In the overall, India was complimented for its
reform process, including trade liberalisation and simplification
of trade and investment regime. A view was conveyed that something
additional needed to be done if the ambitious growth targets were
to be met. Many delegations also stressed that India's efforts
would be greatly enhanced by steps on the part of India's trading
partners to reduce, if not remove, the impediments to India's
exports, especially in the context of new negotiations in line
with the Doha Work Programme. While India reiterated its support
for WTO and the Doha Work Programme, it was added that if further
progress was to be made, the onus remained on the developed countries
to keep the promises made in Doha. This view was endorsed by many
other members who also said that they looked to India for leadership
in these negotiations.
