SUBJECT- MANAGERIAL ECONOMICS
TOPIC- IMPACT OF WTO ON INDIAN ECONOMY FOR THE
PAST 10 YEARS.
NAME - NITESH SHUKLA
DIV - C
WTO is basically an internationally recognized global organization which clearly defines the role of trade between the nations and to avoid conflict over it. The primary goal of ...view middle of the document...
* Significant role was played in agricultural sector of India by WTO where trade barriers were removed and price of the sectors’ product was set high in international market which ultimately benefitted India a lot as India is basically an agriculture dominated country.
* It also had a role of taking textile and clothing sector of India to a greater height.
* WTO has played a significant role in increasing FDI and Portfolio Investment over the period. As per stats net FDI in year 2008-09 for India was $ 35 Billion.
* A long term role of liberalization and globalization of Indian economy has been taken in to consideration.
* Service export of India went to a massive $ 102 billion in year 2008-09 from $ 5 billion in 1995. It basically happened because of the introduction of GATS (General agreement on trade in services) by WTO.
* Protection of intellectual property rights has been a characteristic feature of WTO, but TRIPs goes against the Indian Patent Act of 1970. Agriculture and Pharmaceutical are key examples concerning this unfavorable impact and role of WTO.
* Agreeing to TRIMs also caused tension in the country because the particular agreement contradicts our objective of achieving self-growth based on the resources and technology available in our own country.
* Complying with GATS also increased foreign exchange burden over India as GATS basically favored developed nations. GATS just created problem for India as the rapid growing service sector in India will now have to compete to giant foreign firms.
Thus in above pages we analyzed the positive and negative role of WTO on Indian economy and also a small outline of their impacts in present scenarios such as where it proved beneficial for the India and where it created a problem for the country.
IMPLICATIONS OF WTO MEMBERSHIP FOR INDIAN ECONOMY (LAST 10 YEARS):-
1. Protection of Domestic Industries:-
* With the advent of WTO, India has managed to hit its tariff lines bound and even tariff escalation has come up for the products manufactured by domestic industries of India. Ex- Cotton, Textiles.
* All product categories have hit but food products, textiles and consumer goods have hit the most.
* The tariff lines bound of India are around 67% of all tariff lines, including 100% of agriculture, 62% on industrial goods, 25% on intermediate goods and 40% on finished goods.
* Now going to the aspect of AMS, there has been reduction of 13% in AMS for India over a period of 10 years.
* Quotas were abolished for clothing and textiles under the Multi fiber agreement initiated by WTO.
* To a large extent domestic industries of India have braced under the regime of WTO.
* Competition has been driven in Indian industries by the removal of quantitative restrictions and imposition of the patent regimes.
* Process patents were introduced for domestic...