World Trade

Organisation And Its

Implications For India

Bhanavi gupta 1910212

Santu maity 1910232

Afnain anjum 1910235

Dhanush c.s 1910245

Rakshitha 1910269
 WTO

– India is a founder member of World Trade Organization and also treated as the
part of developing countries group for accessing the concessions granted by the
organization. As a result, there are several implications for India for the various
agreements that are signed under WTO discussed as follows:
FAVOURABLE IMPACT

Increase in export Agriculture Export

earning

Foreign Direct
Textile and clothing
Investment
1.INCREASE IN EXPORT
EARNING
 Growth in merchandise export :

this increases the exports of developing countries because of reduction in tariff

and non tariff trade barrier.
 Growth in service exports :
GATS were beneficial for developing countries like india which increased export
services.
2.Agriculture export

– Reduction of trade barrier and domestic subsidies raise the price of agricultural
products in international market, India hopes to benefit from this in the form of
higher export earning from agriculture.
3.Textile and clothing

– Multi-Fiber Agreement (MFA): This agreement is dismantled with effect from 1

January 2005. The result was removal of quantitative restrictions (QRs) on the
textile imports in several European countries. As a consequence a huge textile
market is opened up for developing countries like India. In order to take
advantage of opening up better preparedness is required in terms of
modernization, standardization, cost efficiency, and customization to meet
challenges of foreign customers.
4.Foreign direct investment

–  As per the TRIMs agreement, restrictions on foreign investment have been

withdrawn by the member nations of the WTO. This has benefited developing
countries by way of foreign direct investment, euro equities and portfolio
investment. In 2008-09 the net foreign direct investment in India was 35 billion
Unfavourable impact

TRIPs TRIMs

Trade and
GATS non-tariff
barriers
1.TRIPs

–  TRIPs (Trade Related aspects of Intellectual Property) • Protection of intellectual property rights has been
of the major concerns of the WTO. As a member of the WTO, India has to comply with the TRIPs standards.
• However, the agreement on TRIPs goes against the Indian patent act 1970, in the following way.
i. Pharmaceutical sector
• Indian pharmaceutical companies could sell good quality products at low prices. However under TRIPs
agreement, product patents will also be granted that will raise the prices of medicines, thus keeping them out
of reach of the poor people, fortunately, most of drugs manufactured in India are off – patents and so will be
less affected.
– ii. Agriculture
– • Since the agreement on TRIPs extends to agriculture as well; it will have considerable implications on
Indian agriculture. The MNG, with their huge financial resources may also take over seed production and
will eventually control food production.
2.TRIMs

Trade Related Investment Measures (TRIMS): The agreement prohibits the host

country to discriminate the investment from abroad with domestic investment i.e.
agreement requires investment to be freely allowed by nations

– TRIMs (Trade Related Investment Measures) • The agreement on TRIMs also

favors developing nations as there are no rules in the agreement to formulate
international rules for controlling business practices of foreign investors. Also,
complying with the TRIMs agreement will contradict our objective of self-reliant
growth based on locally available technology and resources.
3.GATS

– GATS (General Agreement on Trade in Services) • The agreement on GATS will

also favour the developed nations more. Thus, the rapidly growing services
sector in India will now have to compete with now have to complete with giant
foreign firms. Moreover, since foreign firms are allowed to remit their profits,
dividends and royalties to their parent company, it will cause foreign exchange
burden for India
4.Trade and non-tariff barriers

– Trade and Non-tariff barriers • Reduction of trade and non-tariff barriers has
adversely affected the exports of various developing nations. Various Indian
products have been hit by non-tariff barriers. These include textiles, marine
product, floriculture, pharmaceutical basmati rice, carpets, leather goods etc.
CONCLUSION

– The Indian economy has experienced a major transformation as a result of the

changing multilateral trade discipline within WTO framework.  It is expected
that the sectors such as textiles, clothing, leather and leather products, and
food, beverages, and tobacco etc would experience growth in output and
exports.  However, there is a serious and urgent need to re-look the strategies
followed by individual firms in the changing context of increasing competition
and opened markets