India's global trade strategy today in the light of changing agenda of the WTO

India's global trade strategy today in the light of changing agenda of the World Trade Organisation

             India has been gradually moving away from a closed and protectionist economy and has been orienting itself towards the market, both in terms of disinvestment (privatization) and opening up markets to foreign players (liberalization). India did not succumb to international pressures (from IMF or the World Bank) to liberalize overnight and went in for unilateral liberalization.

The Foreign Trade Policy has a two pronged objective: to double India’s share of global merchandise trade by 2009, over the 2004 level, and to use trade to generate employment.  Several free trade zones are established that facilitate 100 percent Foreign Direct Investment. This seems to have been achieved by having a very pro-export trade policy driven by incentives to exporters, which is quite the contrast to what was the policy up until liberalization. While exports are a key goal, the Foreign Trade Policy also acknowledges the importance of facilitating imports required to stimulate the economy and calls for a simplification of import procedures and reduction of import barriers. It also calls for coherence and consistency between trade and other economic policies. Specific sectoral strategies have been put in place for agriculture and other sectors with potential for generation of exports and employment in semi urban and rural areas. Although India has been a firm supporter of multilateral liberalization, it has also sought out Regional Trade Agreements (RTA) in recent years.

India has consistently taken the stand that the launch of any new round of talks depends on a full convergence of views amongst the entire WTO membership on the scope and framework for such negotiations. Our more urgent task is to resolve the concerns of developing countries on implementation of the Uruguay Round agreements. We are against calls for new commitments from the developing world for achieving symmetry and equity in the existing agreements. It is in favour of non-trade’ issues are permanently kept off the negotiating table.

It has also been possible to maintain without hindrance the domestic policy instruments for promotion of agriculture or for targeted supply of food grains. Domestic policy measures like the operation of minimum support price, public distribution system as well as provision of input subsidies to agriculture have not in any way been constrained by the WTO agreement.

Indian industry has had to face greater competition in the wake of globalisation. But it has successfully completed, as can be inferred from the fact that there has been no particular surge in imports.