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Assignment No.

Business Economics

The implications of WTO Membership for Indian economy
in the last 10 years.

Submitted By:
Anchit Agrawal
A Division

Faculty In-charge:
Prof. Neelkanth Athalye

The Background
After the Second World War, the world saw a need to uniform trade practices and other services.
This is because the world war left a deep impact on the economy of nearly all of the globe. The
only solution to cope up from this problem was seen as trading and hence mutually flourishing.
Also a global uniformity of trade practices was also needed so that MNC’s could expand their
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Herein a global organizational meet occurred and hence a common consensus was met resulting in the formation of GATT. It can also be viewed as an organisation with a set rules and regulations made with common consensus which govern the trade of the world. India and WTO India has a prestigious designation as MFN (Most Favoured Nation) in WTO. Various meetings and conferences were held after the inception of GATT with agendas of development and mainly working on cutting various tariff barriers and trade barriers in the market. GATT or General Agreement on Tariffs and Trade was thus established in October 1947 with India being one of the founding parties.businesses. 2 | Page .  WTO aims at liberalization of economy but some countries say that their voice are not heard properly. WTO first appeared on 1st January 1995. In spite all of this. It served as a negotiating point for developing countries like India and Brazil as well as for developed countries like USA and UK. They are:  As it is a collection of viewpoints of different countries. It was an extension of GATT agreement which happened on the Uruguay round. Also it can be viewed as a place wherein international disputes can be solved easily and methodologically for mutual agreement. India was a proud founding member who first consented this organisation. What is WTO? The WTO can be viewed from many angles. It is a platform wherein representatives of various nations come together to negotiate in terms of trade liberalisation for global benefit. This need lead to the formation of World Trade Organisation. It has its headquarters at Geneva. Switzerland and has around 153 nations as its members till date. As the world was changing therefore thinking of globalization and other world changing prospects the world required a more stringent and organized forum. therefore certain awkward situations may arise. This enables it to have special rights as it is a developing country and also has a great say for development concerns. India has a lot of zones of concern regarding this WTO membership.

Various administrative and legal aspects of the country are also a barrier which India faces and has to be overcome by it with the help and suggestions of organizations like the WTO. personally I would say that India must keep voicing its opinions and negotiating agreements as the prime member because trading is the backbone for the growth of an economy. It took outmost care that the country’s essential beings like basic rural items and eatable oil would be far better protected. In the Uruguay round negotiations a limit in domestic subsidies was negotiated which have affected India to a large extent. a) Protection of Domestic Industries Domestic Industries specifically of any nation mainly depends on the intensive labour and time taken for effective production. On the basis of the 10 years’ experience that India has had with the WTO. b) Trade in Agricultural Products India had been a founding member of GATT. Economically. The main reason a country invests this much amount and time into this activity is because it gives a push to the country’s GDP if these reserves are maintained. Moreover it must also have a clear and coherent objectives of the 3 | Page . Improvement in various agricultural practises.India moreover has to improve its performance in various aspects. therefore it already followed some of the rules like keeping up with changing duty rates. Hence. This concern becomes a major source of problem for developing nations as developed nations also try to protect their industries. The highlight point is that even if a lot of trade barriers have been reduced then also the developed countries will have a lot of funds to provide subsidies to domestic producers (which is in itself a very difficult outcome) there will still be possibilities that the developed countries will not get a chance to boost their economy easily. a country thinks of protecting its own domestic industry so that it can be stable if an economic crisis arises in the economy. It is because of these type of precautionary measures that a country thinks of protecting its own domestic industries. FDI and FII attraction also is required. it must reduce trade barriers and restrictions which in turn will result in further growth of the country and the world as a whole.

Notwithstanding. India must also improve its means to give subsidiary allowances to its producers (which are a majority in the nation) so that the producers maintain their sentimental value and also take care of their crops. d) Technology Transfer The internal load of outside direct speculation has been researched. Also for the effective operation of the organisation itself the member countries must take an initiative and make in new policies and strategies so that they can be easily understood by all member nations.future for the country so that a better negotiation keeping in line with the changing trends and global scenario can be considered. This gives a sign whether the impacts of IPR on internal FDI fluctuate by level of monetary 4 | Page . Also the main source of subsidy for them is the income tax benefit what they get and not any indirect income is received by them. The government publishes this report at regular intervals. India’s affiliation with WTO has always lead it to think on these developmental lines which will always give it that split second advantage over other developing countries. and trademark rights are measurably critical determinants of FDI. The drawbacks of various agricultural policies should also be identified and discussed for better negotiation. when each of the three measures are entered together. just the patent rights variable remains emphatically huge. c) EX-IM Policy The EXIM policy are set rules given by Directorate General of Foreign Trade for Export and Import of Goods and services in the country. The outcomes demonstrate that separately patent rights. This was established so that special focus to the Exports and Imports of the country can be given. The diverse IPR measures are inspected independently. The aftereffects of isolating the example into diverse nation gatherings are demonstrated. Special Economic Zones or SEZ was also a concept developed by India on the basis of promoting growth in the industry as well as promoting development of the country. copyrights. Also vocational institutions like ATDC (Apparel Training and Design Centre) have been established so as to aid these industries in skilled man power.

China exports manufactured goods. the developing nations will keep their WTO discussions unending until a required negotiation cannot be achieved. Moreover. the positive relationship of IPRs to internal FDI is available for every one of the three nation wage bunches. the internal FDI stock is decidedly and essentially identified with more grounded patent assurance. if they want to negotiate without the interference of other developed powers like UK and USA they would do that on a one on one basis. yet with an under 2% increment among gatherings 2 and 3 nations.advancement. To save space. The cooperation of these trade blocks is fundamentally required so that economic growth can occur freely. A 1% reinforcing of patent laws is connected with an 11. WTO helps in reducing trade barriers but nationally it is the trade blocks which try to reduce trade barriers. For every situation. Globally. Therefore it can be safely concluded that WTO is dying a slow and painful death. just the outcomes with patent rights are demonstrated since patent assurance is the more essential licensed innovation component concerning internal FDI. Hence developing nations like India have asked for reduction in tariff rates. The effect is biggest among newly created nations. 5 | Page . All of these countries might want more liberalisation to take place but one this is for sure. India exports services. f) “Death of WTO” in the future WTO serves as an intermediator organisation regulating trade practises but with the increasing global networking and cooperation looks like this world would not require this a lot anymore. As the table demonstrates. This membership with the WTO will impact the trading blocks in a positive way if the negotiations work in a favourable manner for the country. e) Impact on Trade Block Trade blocks are essential commodities in trading. Hence eliminating the need for WTO.2% expansion in the load of internal FDI in gathering 1. India also possesses the advantage that it has skilled manpower. Brazil exports agricultural products and Russia’s economy depends on natural resources. the quantitative relationship does shift by level of advancement. Be that as it may.