WTO and India

WTO and India

 [op-ed snap] How to protect trade in a tug of war between nationsop-ed snap


From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 3- Cause of the emergence of trade disputes and how can emerging economies negotiate the deals


Developing countries have argued for decades that the rules governing international trade are profoundly unfair. But similar complaints are now emanating from the developed countries that established most of those rules.

Why are developed countries complaining now?

  • Competition: A simple but inadequate explanation is “competition.”
    • Turning tide: In the 1960s and 1970s, industrialized countries focused on opening foreign markets for their goods and set the rules accordingly.
    • Since then, the tide has turned.
  • Left behind communities in developed countries
    • Cheap labour-an advantage: One reason why emerging-market producers are competitive is that they pay workers less.
    • Job creation in services by developed countries: To replace lost manufacturing jobs, developed economies have been creating jobs in services.
    • Not everyone has moved to the service sector job: Unfortunately, not everyone in developed countries has been able to move to good service jobs.
    • Efforts by the left-behind bring back the manufacturing job: The left-behind former manufacturing communities have a voice in the capital city now, and it wants to bring back manufacturing.
    • Yet this explanation, too, is incomplete. The ongoing US-China trade war is not about manufacturing, it is about services.
  • Services a reason behind US-China dispute: Much of the US dispute with China is not about manufacturing. It is about services.
  • Emerging market competition increasing in services: Although eight of the top ten service exporters are developed countries, emerging-market competition is increasing.
    • New services related rules: This increased competition from emerging markets is prompting a major push by advanced-economy firms to enact new service-related trade rules.
    • An opportunity to protect the developed country producers: The new rules will ensure continued open borders for services. But it will also be an opportunity to protect the advantages of dominant developed-country producers.

Trade disputes- The combined effects of the two factors

  • There are no easy trade deals anymore.
    • Two conflicting factors: In sum, two factors have increased the uneasiness over international trade and investment arrangements.
    • First-Left behind community: Ordinary people in left-behind communities in developed countries are no longer willing to accept existing arrangements.
    • They want to be heard, and they want their interests protected
    • Second-emerging economy demanding access to service sector: At the same time, emerging-economy elites want a share of the global market for services and are no longer willing to cede ground there. So, there is no easy trade deal anymore.
  • Trade disputes-exercise in power politics
    • High tariffs and ram tactics: Threats of sky-high tariffs to close off markets, for example, and battering-ram tactics to force “fairer” rules on the weaker party.
    • The important difference from the past: One important difference is that the public in emerging markets is more democratically engaged than in the past.
    • Short timed victory: Any success that rich countries have in setting onerous rules for others today could prove pyrrhic.
    • No consensus on the rules: For one thing, it is unclear that there is a consensus on those rules even within developed countries. For example- rules to regulate social media.

Way forward

How should developed countries respond to domestic pressures to make trade fairer?

  • Demand lower tariffs from developed countries: For starters, it is reasonable to demand that developing countries lower tariffs steadily to an internationally acceptable norm.
  • Challenge the discriminatory barriers: Discriminatory non-tariff barriers or subsidies that favour their producers excessively should be challenged at the World Trade Organization.
  • Go for less intrusive treaties: To go much beyond these measures—to attempt to impose one’s preferences on unions, regulation of online platforms, and duration of patents on other countries—will further undermine the consensus for trade.
    • Less intrusive trade agreements today may do more for the trade tomorrow
WTO and India

[op-ed of the day] Delhi-Davos disconnect-India must find ways to take advantage of new opportunitiesop-ed snap


From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 3- Trade war, Globalization and effects on Indian economy.


Given its increased heft in the global economic order, India ought to be at the leading edge of the current debate of the future of capitalism.

The emergence of “stakeholder capitalism”

  • Interests of all shareholder: Klaus Schwab, who founded the World Economic Forum 50 years ago, wants capitalists to look beyond their shareholders and consider the interests of all the stakeholders.
    • Long overdue debate: Some hope that the debate on stakeholder capitalism is a long-overdue recognition of the capitalist excesses of recent decades.
  • Generating value for customers: Last August, the Business Roundtable in the US, which brings together some of the top American corporates, said American companies must now generate value for customers.
    • Invest in their employees.
    • Deal fairly with suppliers and support the communities in which they operate even as they service their shareholders.
  • Scepticism over “interests of all shareholders”: Sceptics say that this is a nice way of saying the right things, repackaging old ideas on corporate social responsibility and creating illusions about reforming capitalism.
    • Cynics insist that it will be business as usual for the world’s capitalists.
    • Reflection of deeper crisis: Beyond this divide between optimists and pessimists, the discourse on “stakeholder capitalism” is a reflection of the deeper crisis afflicting the global economy today.

Three major challenges according to WEF

  • In its annual survey on global risks, the WEF has identified many challenges. Three of them stand out.
  • First Challenge: Polarised politics
    • In the US Trump is unlikely to be defensive.
    • While the dominant sentiments see Trump as the very embodiment of nationalism and populism that are polarising politics around the world.
    • Others point to the structural conditions that have bred these forces.
    • America’s working-class whose wages haven’t risen in decades, whose jobs are less secure than ever rallied behind Trump.
    • Politics in the US: Much the same happened in the British elections last year.
    • Tory leader Boris Johnson won a sweeping mandate by breaking into the working-class strongholds of the Labour Party.
  • Second Challenge: Trade war
    • Trump had a long record of denouncing free trade.
    • Many had hoped that Trump will moderate his anti-globalist rhetoric once in office.
    • Attack on a core principle of globalisation: Trump has taken a pickaxe to the core principles of the globalised economic order – free trade, open borders and multilateralism.
    • Renegotiating the treaties: The US has renegotiated a 25-year old trade agreement with America’s neighbours, Canada and Mexico.
    • The threat of all-out-trade war with China: Trump’s threat of an all-out trade war with China over the last couple of years has led to an interim agreement.
    • The agreement commits Beijing to reduce its trade surplus with the US by importing more.
    • The trade deficit of the US with EU: At Davos, Trump is expected to turn his ire on the EU, which has a near $200 billion trade surplus with the US.
  • Third challenge: Technology
    • War in technology domain: The trade wars among the world’s major capitalist centres is accentuated by the technological revolution, especially in the digital domain.
    • Need for coordination: The Davos report on global risks argues that the realisation of the full potential of new technologies depends on unprecedented coordination among all stakeholders.
    • Digital fragmentation: What is emerging instead is “digital fragmentation” marked by the extension of geopolitical and geo-economic rivalries into the new domain.
    • Digital issues have come to the front and centre of American arguments with Europe.


  • India must find ways to take advantage of the new opportunities from the unfolding rearrangement of the global capitalist system.


WTO and India

Explained: WTO’s dispute settlements mechanismExplained


From UPSC perspective, the following things are important :

Prelims level : WTO

Mains level : India and its outstanding issues with WTO

The World Trade Organization’s (WTO’s) dispute settlement mechanism is on the brink of collapsing.Of the three members currently on the seven-member body, the terms of two end today.

Issues with the WTO Appellate Body

  • The Appellate Body, set up in 1995, is the standing committee that presides over appeals against judgments passed in trade-related disputes brought by WTO members.
  • Over the last couple of years, the membership of the body has declined to three persons instead of the required seven.
  • US has blocked the appointments of new members, and the reappointments of members who had completed their four-year tenures.
  • It believes the WTO is biased against it, and has criticised it for being “unfair”.
  • Over 20 developing countries met in New Delhi in the summer to discuss ways to prevent the WTO’s dispute resolution system from collapsing all together. Their efforts have not produced the desired results.

Why in news?

  • This dispute settlement mechanism of WTO requires at least three members to function.
  • But with no members, world trade is about to enter a phase in which there will be no official resolution for many international disputes — potentially creating the circumstances for a free-for-all.
  • It could also signal the demise of the 24-year-old WTO itself.

How has the shortage of members impacted the working of the Appellate Body?

  • The three members have been proceeding on all appeals filed since October 1, 2018.
  • India has been impacted directly as a result of this situation.
  • In February 2019, the body said it would be unable to staff an appeal in a dispute between Japan and India over certain safeguard measures that India had imposed on imports of iron and steel products.
  • The panel had found that India had acted “inconsistently” with some WTO agreements.
  • Though India had notified the Dispute Settlement Body of its decision to appeal certain issues of law and legal interpretations in December 2018.
  • While the US is directly involved in more disputes than other WTO member countries, several countries — including India — enter disputes as third parties.

Trump being Trump: Yet again

  • Trump sees the WTO — which seeks to ensure equal treatment for all its members — as standing in the way of “America First”, tying its hands when it tries to protect American workers or seeks to effectively employ the advantages of being the world’s most powerful economy.
  • Trump supporters believe the WTO has encouraged China — helping it to strengthen its economy at the cost of other nations including the US, while doing nothing about the unfair trade practices that it uses widely.

What lies ahead?

  • The WTO’s dispute settlement procedure is seen as being vital to ensuring smooth international trade flows. The Appellate Body has so far issued 152 reports.
  • The reports, once adopted by the WTO’s disputes settlement body, are final and binding on the parties.
  • There is now great uncertainty over the dispute settlement process.
  • Once the body becomes non-functional, countries may be compelled to implement rulings by the panel even if they feel that gross errors have been committed.
  • A country which refuse to comply with the order of the panel on the ground that it has no avenue for appeal may run the risk of facing arbitration proceedings initiated by the other party in dispute.

Implications for India

  • This does not bode well for India, which is facing a rising number of dispute cases, especially on agricultural products.
  • In the last few months alone, four cases have been brought to the WTO against India’s alleged support measures for its sugar and sugarcane producers.



  • The WTO is an intergovernmental organization that is concerned with the regulation of international trade between nations.
  • The WTO officially commenced on 1 January 1995 under the Marrakesh Agreement, signed by 123 nations on 15 April 1994.
  • It replaced the General Agreement on Tariffs and Trade (GATT), which commenced in 1948.
  • It is the largest international economic organization in the world.

Functions of WTO

  • The WTO deals with regulation of trade in goods, services and intellectual property between participating countries.
  • It provides a framework for negotiating trade agreements and a dispute resolution process aimed at enforcing participants’ adherence to WTO agreements, which are signed by representatives of member governments and ratified by their parliaments.
WTO and India

WTO rules against India’s export subsidiesIOCR


From UPSC perspective, the following things are important :

Prelims level : WTO

Mains level : India and WTO

  • The WTO’s dispute settlement panel ruled that India’s export subsidy schemes, including the provision for special economic zones, violated core provisions of global trade norms.

A recap of India’s dispute with the US

  • Last year, the US had taken India to the WTO’s over the issue of export subsidy schemes, claiming that they were hurting American companies.
  • The US alleged that some subsidy programmes run by the Indian government were giving undue advantage to Indian businesses.
  • The Trump administration filed a case against India citing a violation of the SCM Agreement as India’s gross national product per capita was over $1,000.
  • While the government had earlier said that it would phase out the aged export subsidy programmes, no such scrapping has occurred.
  • It has also come to light that India is already working on rolling out new schemes to replace the old programmes.

Recent WTO ruling

  • Upholding US’s complaints in the case WTO panel rejected India’s claims that it was exempted from the prohibition on export subsidies.
  • India had made claims under the special and differential treatment provisions of the WTO’s Agreement on Subsidies & Countervailing Measures (SCM).
  • The panel further ruled that India is not entitled to provide subsidies depending on export performance and said it’s per capita gross national product crossed $1,000 per annum.

What does it mean?

  • It is worth noting that under Article 3.1 of the WTO’s SCM agreement, all developing countries with gross per capita of $1,000 per annum for three consecutive years are required to stop all export incentives.
  • The US had earlier accused India of giving prohibited subsidies to Indian steel producers, pharmaceuticals, chemicals, information technology, textiles and apparel.
  • While the panel ruled in favour of US and urged India to withdraw the subsidies without delay.
  • While the panel upheld most of the claims made by the US, it rejected some points pertaining to a subset of exemptions from customs duties and an exemption from excise duties.

Impact of the ruling

  • Some of the schemes that will be affected by the WTO’s ruling include Merchandise Exports from India Scheme (MEIS), export-oriented units (EOU) scheme.
  • It will hamper some sector-specific schemes, including Electronics Hardware Technology Parks (EHTP) scheme and Bio-Technology Parks (BTP) scheme, Export Promotion Capital Goods (EPCG) scheme; and duty-free imports for Exporters Scheme.
  • Under the various schemes, domestic companies are currently receiving billions in subsidies on an annual basis.
  • Withdrawing the subsidies may have a significant effect on the performance of such companies.

What lies ahead?

  • The WTO dispute settlement panel has asked India to withdraw the concerned export subsidy schemes within a time period of 90 days from the adoption of the report.
  • It also asked India to withdraw prohibited subsidies under the EOU/EHTP/BTP schemes, EPCG and MEIS, within a period of 120 days and SEZ scheme within 180 days.
  • India has a month to appeal against the WTO’s order.
  • However, India has the right to challenge the ruling before the appellate body of the WTO dispute settlement mechanism with regards to export subsidy schemes.
WTO and India

Explained: Is the WTO becoming a new battlefront?IOCR


From UPSC perspective, the following things are important :

Prelims level : WTO

Mains level : WTO and its relevance


  • S. President Trump earlier this month attacked the World Trade Organization (WTO) for allowing countries such as India and China to engage in unfair trade practices that affect American economic interests.
  • While addressing a gathering he took issue with the “developing country” status enjoyed by India and China at the WTO.
  • He argued that these countries are not developing economies, as they claim to be, but instead grown economies that do not deserve any preferential trade treatment from the WTO over developed countries such as the U.S.

The “developing country” status

  • The “developing country” status allows a member of the WTO to seek temporary exception from the commitments under various multilateral trade agreements ratified by the organisation.
  • It was introduced during the initial days of the WTO as a mechanism to offer some respite to poor countries while they try to adjust to a new global trade order marked by lower barriers to trade.
  • Countries such as India and China, while seeking exception from various WTO agreements, have argued that their economic backwardness should be considered when it comes to the timeline of implementation of these agreements.
  • The issue of farm subsidies, for instance, is one over which rich and poor countries have had major disagreements.

Granting of the status

  • The WTO does not formally classify any of its members as a developing country.
  • Individual countries are allowed to unilaterally classify themselves as developing economies.
  • So, as many as two-thirds of the 164 members of the WTO have classified themselves as developing countries.
  • Since the WTO allows countries to unilaterally classify themselves as “developing”, many countries have been happy to make use of this freedom.
  • Even many developed economies such as Singapore and Hong Kong which have per capita income levels higher than the U.S., have made use of the provision to classify themselves as growing economies.

How do countries such as India and China benefit from the special status?

  • The WTO was envisaged as an international trade body to help foster more trading in goods and services between nations by lowering various barriers to trade such as tariffs, subsidies and quotas.
  • Towards this end, several trade agreements have been ratified over the years under the WTO.
  • Developing countries such as India and China, however, as earlier mentioned, can seek to delay the implementation of these WTO agreements owing to their disadvantaged economic status.
  • They can continue to impose tariffs and quotas on goods and services in order to limit imports and promote domestic producers who may otherwise be affected adversely by imports that are lower in price or better in quality.
  • India, for instance, subsidises agriculture heavily in the name of food security in order to protect its farmers.
  • While local producers may be protected by protectionist barriers such as tariffs, consumers in India and China will have limited access to foreign goods.

Is the U.S. justified in criticizing the WTO?

  • While the “developing country” status was supposed to help poor countries ease gradually into a more globalised world economy, it has had other unintended effects.
  • Further, countries such as China justify that while their per capita income level has increased many-fold over the last few decades, these are still far below that of high income levels in countries such as the U.S.
  • Thus, Mr. Trump may have a prima facie case in urging the WTO to address the issue of how countries arbitrarily classify themselves as “developing” to justify raising trade barriers.

Who are at loss with ‘developing’ status?

  • This is not to say that WTO rules always work to the advantage of developing countries alone.
  • Developed countries such as the U.S. have tried to force poorer countries to impose stringent labour safety and other regulations that are already widely prevalent in the West.
  • These regulations can increase the cost of production in developing countries and make them globally uncompetitive.
  • Developing countries further view the introduction of labour issues into trade agreements as beyond the scope of the WTO, which is primarily supposed to be an organisation dealing with trade.

Status not a big indicator

  • Many economists also oppose the fundamental argument of poorer countries that low per capita income levels justify their decision to raise trade barriers.
  • They argue that free trade benefits all countries irrespective of their income levels.
  • In fact, they argue that protectionist trade barriers impede the transition of developing economies to higher income levels.
  • The developing country status may thus simply be a false pretext to justify protectionism.

Targeting China

  • Trump’s criticism of the WTO is seen by many as the opening of a new front in his trade war against China.
  • Earlier, he had termed China as a “currency manipulator” for allowing the yuan to depreciate against the dollar.
  • China and the U.S. have also been slapping steep tariffs on imports from each other since early last year.
  • China’s developing country status at the WTO gives Trump yet another opportunity to attack China.


  • Since developing countries are likely to oppose any efforts to stop them from protecting their domestic economic interests, global trade rules are unlikely to experience any drastic reform any time soon.
  • The inability of the WTO to rein in global trade tensions has raised questions about its relevance in today’s world.
  • This is particularly so given that global tariff rates over the years have dropped more due to bilateral trade agreements rather than due to multilateral trade agreements brokered at the WTO.
  • Further, the dispute resolution mechanism of the WTO, which can pass judgments on disputes, lacks the powers to enforce them as the enforcement of decisions is left to individual member states.
  • While initially envisaged as a global body to promote free trade, the WTO has now deteriorated into a forum where competing governments fiercely try to protect their narrow interests.


Everything that you should know about the World Trade Organization (WTO)

WTO and India

[op-ed snap] The World Trade Organization could still prove itself effectiveop-ed snap


From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : WTO - developing country status


US as accused developing countries such as China and India of unfairly benefitting from their “developing country” status under the WTO regime.


  1. The regime permits countries with special and differential treatment. 
  2. It also let developing countries adhere to less onerous norms such as longer periods of compliance, without violating the WTO rulebook.

Why the US took this stand?

  1. WTO dispute settlement system has favoured developing countries. The US has lost most of the disputes raised against it.
  2. Trump recently attacked the US’ dispute settlement system by not allowing the appointment of new members on the appellate body.
  3. The US already has a running trade war with China.
  4. So far, Trump had adopted revisionist policies on trade by pulling out of TPP, forcing changes in the NAFTA, etc.,

Problems with US’ stand

  1. The US and other rich countries have always enjoyed SDTs in agreements on textiles and clothing, and also agriculture.  Even today, the subsidies given in the West to rich farmers continue to operate unabashedly.
  2. Despite the shrinking contribution of agriculture to the US GDP, it has been pointed out that the per-farmer subsidy in the US is 70 times that of China, 176 times that of Brazil and 267 times that of India. 
  3. The textiles and clothing agreement was used as a trade-off with the deal on intellectual property rights. The latter continues to function but the trade-off did not adequately benefit countries exporting apparel. 

Need for a change in country status at the WTO

  1. The international community has failed to ensure that global trade benefits all and that subsidies help the poor.
  2. Irrespective of their status, all countries house their share of the poor and not-so-poor.
  3. Rules of the multilateral trading system have evolved with the objective of reducing barriers to free trade in a manner that its benefits are spread across communities and protections are accorded to weaker sections. For farms in the West, different standards have been adopted.

Way ahead

  1. India is home to more than 600 million poor people.  It needs to continuously review and fine-tune its efforts to reduce poverty by implementing necessary bold and structural reforms to empower the poor to overcome poverty.
  2. There is a need for an impartial, operational and effective dispute settlement mechanism at the WTO. 
  3. The US must review its position and engage with the global community to design an effective dispute settlement mechanism.


Unilateral efforts, such as those proposed by the US, and its threat of leaving the WTO, are likely to do more harm than good, particularly to the intended beneficiaries of such actions. However, an opportunity has been created by the US and it must be seized by the global community to adopt a nuanced approach towards reforming the WTO.

WTO and India

[op-ed snap] WTO may still emerge as the lynchpin of global trade governanceop-ed snap


India and China are stripped of the “developing nations” status.


  1. Trump has reiterated that India and China have benefited immensely by misusing the developing country tag. 
  2. He blamed the WTO for this lapse and reiterated his threat to leave the institution.

Background of various countries

  1. China: The growing economic and military might presents the Chinese an opportunity 
  2. US: It fears to lose the mantle of the world’s preeminent power after three decades of unchecked hegemony.
  3. Chinese rise and US fears are straining their bilateral trade and causing collateral damage to the institution.

Nature of contemporary trade

  1. Structural transformation – Since the WTO came into being in 1995, the world has witnessed massive structural changes.
  2. Technologies- New technologies have transformed the way we live, communicate, and trade. In 1995, less than 0.8% of the world’s population used the internet; in June 2019 it was around 57%.
  3. Complex production chains – Communication technologies and containerization lowered costs and boosted volumes of components of the trade. This allowed production chains to become increasingly international and also complex. An iPhone has about 14 main components that are manufactured by 7-8 multinational companies in more than 40 countries.
  4. Increased trade volumes – Overall trade in goods has nearly quadrupled since 1995. Growth in trade has exceeded growth in world GDP and has been associated with improved standards of living.
  5. Reduced tariffs –  WTO members’ import tariffs have declined by an average of 15%. Over half of world trade is now tariff-free. 

What WTO does

  1. WTO regulates more than 98% of global trade flows among its members.
  2. It also monitors the implementation of free trade agreements.
  3. It produces research on global trade and economic policy.
  4. It serves as a forum for settling trade disputes between nations.

Assessing WTO

  1. An alternate way to look at the WTO’s success to see the damage in trade value has helped avert. One estimate puts the value of avoided trade wars at $340 billion per year.
  2. The US had earlier used Super-301 legislation to designate specific countries as unfair traders and threatened them with higher tariffs unless they fell in line. Countries such as India and Brazil refused to negotiate under threat of US sanctions. 
  3. A measure is defined as unilateral if it is imposed by a country without invoking the WTO dispute settlement procedures or other multilateral international rules and procedures. Unilateral measures are inconsistent with the letter and the spirit of multilateralism. Article 23 of the Dispute Settlement Understanding prohibits members from doing so.
  4. Dispute Settlement in the WTO has become dysfunctional and appeals to the appellate body are taking longer than the prescribed 90 days.

The multilateral process needs to be strengthened and it cannot happen until the strongest member is vested in it. WTO may still emerge as the lynchpin of global trade governance.

WTO and India

[op-ed snap] Trade rhetoric: On U.S.’s WTO pullout threatop-ed snap


From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : WTO : US. Problem of developing countries


U.S. President threatened to pull the U.S. out of the WTO if it fails to treat the U.S. fairly. He blamed it for allowing too many countries to claim the status of a “developing country”.


  1. In a memo to the U.S. Trade Representative, it was pointed out that nearly two-thirds of the 164 WTO members classified themselves as developing countries and many rich economies claiming to be “growing” rather than “grown” economies.
  2. India and China were targeted in particular for “taking advantage” of the U.S. by classifying themselves as “developing countries” at the WTO. 
  3. The status of a developing country allows countries to seek partial exemptions from the WTO’s rules for free and fair trade between countries. 
  4. It allows countries like China and India to impose higher tariffs on imports from other countries and also offer more subsidies to local producers in order to protect their domestic interests.
  5. Developed countries find this to be unfair on their producers who are put at a relative disadvantage.
  6. Countries like China have argued that their developing country status is justified given their low per capita income.


  1. The “developing country” status that gives substantial benefits to countries that want to protect their domestic interests has skewed global trade over the years in favor of certain countries.


  1. The US is using this pretext to justify further trade barriers against China and other countries. 
  2. This is also used to justify retaliatory tariffs against these countries to boost the “America First” approach.
WTO and India

[pib] UN Convention on International Settlement AgreementsPIB


From UPSC perspective, the following things are important :

Prelims level : Singapore Convention

Mains level : ADR mechanisms

  • The Union Cabinet has approved the signing of the United Nations Convention on International Settlement Agreements (UNISA) resulting from mediation by the India.


  • The UN gen. assembly adopted the United Nations Convention on International Settlement Agreements Resulting from Mediation on 20th December 2018.
  • It is referred to as the “Singapore Convention on Mediation” (the Convention).
  • The Convention provides a uniform and efficient framework for the enforcement of international settlement agreements resulting from mediation and for allowing parties to invoke such agreements.
  • It is akin to the framework that the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) (the “New York Convention”) which provides for arbitral awards.
  • The Singapore Convention defines two additional grounds upon which a court may, on its own motion, refuse to grant relief.
  • Those grounds relate to the fact that a dispute would not be capable of settlement by mediation or would be contrary to public policy.
  • The provisions of the ‘Convention’ are in line with India’s domestic laws and the efforts made to strengthen Alternative Dispute Resolution Mechanisms.


  • Signing of the Convention will boost the confidence of the investors.
  • It shall provide a positive signal to foreign investors about India’s commitment to adhere to international practice on Alternative Dispute Resolution (ADR).


Initiatives to promote ADR Mechanisms in India

  • In order to encourage international commercial arbitration in India, to evolve a comprehensive ecosystem of arbitration the GoI is establishing the New Delhi International Arbitration Centre (NDIAC) as a statutory body.
  • The Commercial Courts Act, 2015, has been further amended and legislative exercise to further amend the Arbitration and Conciliation Act, 1996, is currently underway.
  • These initiatives are being taken with a view to encourage the settlement of commercial disputes, domestic and international, in India through ADR Mechanism of Arbitration, Conciliation and Mediation.
  • A new Chapter (IIIA) has been inserted in the Commercial Courts Act, 2015, for mandatory pre-institution mediation and settlement in certain category of cases.
WTO and India

[op-ed snap] A thumbs down to unilateralismMains Onlyop-ed snap


From UPSC perspective, the following things are important :

Prelims level : Nothing Much

Mains level : US trade practices are against WTO rules.


Economic relations between India and the United States are on a knife-edge after the U.S. took a series of unilateral actions against India’s exports, that began in 2018, followed by India’s recently announced retaliatory move of increasing tariffs on 28 products imported from its largest trade partner. As a result of these developments, India has become the Trump administration’s most significant target after China.

Some background

The Office of the United States Trade Representative (USTR) and the United States International Trade Commission (USITC) — have “investigated” India’s trade policies, the conclusions of which have been used by the administration to demand changes in policies that would benefit American businesses.

Propriety and procedures

  •  It is important to mention here that all of India’s trade-related policies (which include intellectual property rights that were investigated and questioned in the two USITC reports were done under the cover of the U.S.’s domestic laws.
  • This is tantamount to unilateralism, the response to which should be an unequivocal “no” in this age of multilateralism.
  •  Propriety and global trade rules demanded that the concerns of American businesses about India’s policies had to be addressed within the WTO through consultations among the members.

Flawed step

  • The fact that the U.S. is not approaching the WTO to challenge India’s trade and investment policies that American businesses find detrimental to their interests implies the following:
  • India’s largest trade partner is acting in defiance of agreed rules to target India’s WTO-consistent policies.
  • Take, for instance, India’s high tariffs which have left Mr. Trump greatly perturbed.
  • These tariffs were agreed to in the Uruguay Round negotiations in consultation with all members of the organisation.
  • Moreover, in the period since, India has lowered tariffs on many agricultural and industrial products.
  • Contrast this with the U.S.’s position wherein it continues to defend its high levels of agricultural subsidies which are used for lowering commodity prices to levels at which no other country can have access to its domestic market.
  • Thus, the U.S. does not need tariffs to protect its agriculture; it uses subsidies, instead.
  • The WTO also informs us that the U.S. also uses very high tariffs on tobacco (350%), peanut (164%) and some dairy products (118%).


  • The India-U.S. discord over trade stems from a deep-seated desire of U.S. businesses to have a bigger footprint in the Indian economy, and to achieve this goal, the administration is stepping beyond legitimate means.
  • This discord defies Mr. Pompeo’s simplistic formulation that “great friends are bound to have disagreements”.
  • In fact, the basis of the discord lies in the way the U.S. has been targeting India’s policies, disregarding the rule of law.

Way Forward

  • Early resolution of this discord seems difficult as the U.S. has decided to undermine the WTO’s dispute settlement mechanism and walk down the path of unilateralism instead.
  • Under these circumstances, the Government of India would have focus on two fronts: to remain engaged with its largest trade partner and to also engage actively with the global community to make the U.S. understand the imperatives of a rules-based trading system.
WTO and India

WTO moratorium on e-commerce customs dutiesIOCR


From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : WTO moratoruim on E-commerce

  • India and South Africa have asked the WTO to revisit the issues related with moratorium on customs duties on e-commerce trade, which is expiring in December this year.

WTO moratorium

  • Since about 75 countries, led by developed country members, have launched pluri-lateral talks on e-commerce at the WTO.
  • It is a good time for developing countries to discuss common concerns related to e-commerce.
  • The member countries will brainstorm on straightforward matters such as whether binding rules on e-commerce could result in concrete gains for poorer countries.
  • In addition, nuanced issues, such as the possibility of developing nations influencing the outcome of negotiations, will also be explored.

Why scrap WTO moratorium?

  • The existing industries and tariffs play an important role in protecting infant domestic industries from more established overseas competitors until they have attained competitiveness and economies of scale.
  • According to industry experts, India wants an end to the moratorium and imposition of import duties to protect domestic industry and revenue.
  • Since 1998, the moratorium is being extended time and again for two years.
  • The potential tariff revenue loss to developing countries is estimated at $10 billion.
  • The moratorium will negatively impact the efforts of many developing countries, which are laggards as far as digital industrialization is concerned, to industrialize digitally.

Impacting digital industry

  • Customs duty-free imports of digital products may also hinder the growth of the infant digital industry in developing countries.
  • This will also negatively impact digital industrialization, local employment creation and erode trade competitiveness of small and medium enterprises (SMEs) in developing countries.
WTO and India

[op-ed snap] Talking fair trade in DelhiMains Onlyop-ed snap


From UPSC perspective, the following things are important :

Prelims level : WTO

Mains level : Issues to be discussed in Delhi Mini Ministerial meeting


India will host the second mini-ministerial meet of the World Trade Organisation (WTO), on May 13-14, 2019. To discuss the interests of developing and least developed countries in global trade, this informal meet will also focus on the accusation by the U.S. that these economies benefit from exemptions meant for the poorer nations.

US’s Stern attitude

  • The U.S. has refused a reduction in subsidies and also pulled back on its commitment to find a perennial solution to public stockholding
  • In fact, the deadlock left many trade analysts wondering whether this was the beginning of the end for the WTO.

Issues Up for discussion

  • The issues under discussion will relate to protectionist measures, digital trade, fisheries, subsidies, environmental goods, standardisation and implementation of sanitary and phytosanitary measures, and other matters ripe for negotiation and agreement, mainly investment facilitation.
  • From a plurilateral approach toward multilateralism, members may also ensure the sanctity and ‘drivability’ of the WTO.

Issues of concerns


1.Agricultural Subsidies

  • Disagreement – The disagreements between developed countries (the European Union and the U.S.) and developing countries (Malaysia, Brazil and India) to discipline the farm regime in their favour continue, thereby threatening the WTO’s comprehensive development agenda.
  • Support by developed countries to Farms – The expectations of developing countries from trade also get belied due to sizeable support by the developed nations to their farmers in a situation of market failure and other uncertainties.
  • OECD’s estimate – The Organisation for Economic Cooperation and Development estimates the quantum of subsidies by developed nations to vary from $300 to $325 billion annually, which is much higher than that estimated for developing countries.
  • This has become a bone of contention in trade talks as farm lobbies in the U.S., Europe and Japan have steadily exercised political clout to influence officials and lawmakers to continue giving subsidies to farmers.

2.Non-Tariff measures

Measure by developed countries – Another point of concern is that developed countries design and implement stringent non-tariff measures (NTMs) which exacerbate the problems faced by poor countries that are willing to export.

The high cost of trading – NTMs significantly add to the cost of trading.

Asymmetry among exporters – However, the costs of acquiescence with many NTMs are asymmetrical across exporters because compliance depends on production facilities, technical know-how and infrastructure — factors that are usually inadequate in developing economies.

No gain from comparative advantage – These countries are, therefore, unable to compete in international markets and hardly gain from sectors with comparative advantage such as agriculture, textiles and apparels.

The goal of developing countries

  • India, in particular, seeks amendment of laws on unilateral action by members on trade issues and a resolution of the WTO’s dispute settlement system.
  • The expectation is that the meeting may lead to policy guidance on issues such as global norms to protect traditional knowledge from patenting by corporates, protection through subsidies, e-commerce, food security and continuation of special and differential treatment to poor economies.

Past negotiations

 1. The 10th Ministerial Conference (Nairobi, December 2015)

  • It laid emphasis on agriculture trade. But it was a setback to most agrarian economies, including India and in Africa, when developed countries directly challenged their models of food security designed for the poor.
  •  In what has become an increasingly politicised environment, members with wide and divergent interests have simply halted the process and refused to negotiate in good faith across a spectrum of issues’.

2.Buenos Aires

  •  Developed nations created alliances to prepare the ground to push nascent issues such as investment facilitation, rules for e-commerce, gender equality and subsidy on fisheries, while most developing nations were unable to fulfil or implement rudimentary dictums.
  • It was agreed to ‘establish a work programme to examine global e-commerce, with a focus on the relationship between e-commerce and existing agreements.
  • It generated a sizeable debate on the fringes of the conference as many accredited NGOs opposed it and raised concerns that it was a push by dominant global players.

Hopes from Delhi Meeting

  •  The time is opportune for developing countries to voice their concerns and push for a stable and transparent environment for multilateral trade.
  • India must do its homework to focus on the unresolved issues and address the newer ones which are of interest to developed nations, mainly investment facilitation.
  • The WTO needs to be sustained as countries need an international platform to formulate trade rules and bring convergence on divergent matters
WTO and India

[op-ed snap] The case for a progressive internationalop-ed snap


Mains Paper 3: Economy | Effects of liberalization on the economy

From the UPSC perspective, the following things are important:

Prelims level: Gig economy, DiEM25

Mains level: The need for a new global order of democarcy


Problems in bilateral treaties

  1. Earlier this year, it was revealed that India is facing legal claims from international investors in as many as 23 arbitration cases, before various tribunals
  2. These claims, worth billions of dollars, arise out of bilateral investment treaties between India and other states
  3. One striking feature of such treaties is that they allow international investors (primarily MNCs) to initiate a dispute directly in an international tribunal, bypassing the state’s own constitutional system and its courts

Reasons behind such disputes

    1.  Often, the disputes revolve around measures that were triggered by public health emergencies, economic crises or other matters directly involving public welfare — which would, therefore, be permissible under the Constitution, but which a corporation believes have negatively impacted its financial interests

Effect of globalisation

  1. This reveals an important truth about the contemporary, globalised world: issues that were earlier resolved within a sovereign state in accordance with its constitutional system have now acquired a transnational character
  2. For example, because of its attempts to make essential medicines affordable through amendments to its Patent Act, India has come under pressure from the U.S. and the European Union (at the behest of prominent pharmaceutical companies), while finding support and emulation in countries like South Africa and Thailand
  3. In 2011, the EU seized shipments of life-saving Indian drugs that were being transported to Africa and Latin America, on the basis that it could apply its more restrictive patent and customs laws to goods in transit through its territory
  4. The transnational character of these issues suggests that the response cannot succeed if it is unilateral
  5. The issues are not limited to conflicts before international forums. Recent months have seen clashes between national regulatory authorities and the corporations that drive the new “gig economy”, such as Uber
  6. Just like in the case of investment treaties, it is often difficult for one country to tackle the problem alone – especially when the corporation is global in character, and can issue a credible threat of withdrawing substantial levels of investment

The question of accountability

  1. While global problems cannot be solved without nation-states, nation-states cannot solve their problems on their own
  2. India’s battle to preserve affordable access to medicines is part of a larger struggle, where participation in the global intellectual property regime has severely constrained the ability of countries to respond to public health crises
  3. Whatever a country’s Constitution may say about the right to life and the right to health for its citizens, it will still be dragged before an international tribunal if it attempts to forestall or mitigate a public health crisis by lifting patent restrictions upon, for example, a life-saving drug
  4. The point is not only about who finally succeeds in litigation — rather, it is that the final decision is taken by a set of individuals who are beyond the structures of accountability that are established in democratic and constitutional states

Taking a cue from DiEM25

  1. A recent example is that of the Democracy in Europe Movement 25
  2. DiEM25 arose after the debt crisis in Greece had resulted in a wide-ranging “structural adjustment programme” imposed upon that country by the European Commission, the European Central Bank, and the International Monetary Fund (or “the troika”)
  3. This included severe austerity measures (including cuts to public funding, resulting in mass unemployment) and widespread privatisation, in direct contravention of the publicly expressed will of the people, through both elections and a public referendum
  4. The central insight of DiEM25 is precisely that today a progressive movement oriented towards social justice and fundamental rights cannot succeed if it is constrained within national borders
  5. Many of the fundamental decisions that shape national policy (with wide-ranging consequences) are simply beyond the ken of nation-states themselves
  6. For this reason, DiEM25 identifies as “pan-European”, and isolates a range of issues currently left in the hands of national governments powerless to act upon them” — including public debt, banking, inadequate investment, migration, and rising poverty
  7. DiEM25 returns these issues to democratic control, but also acknowledges that the solutions needed to achieve this can only come from transnational action
  8. Another important insight of the DiEM25 manifesto is that the world today is based on the reduction of all political relations into relations of power masquerading as merely technical decisions

Understanding DiEM25 in India’s context

  1. For example, what steps a country like India must take to ensure the availability of life-saving drugs (and not only during a public health crisis) is a decision that must be taken democratically and politically, within the constitutional framework
  2. At present, however, it always remains ultimately subject to a “technical decision” (potentially taken by an international tribunal) about whether India has breached its obligations under an international intellectual property rights treaty regime
  3. What needs to be done is to reshape that regime to make it more democratic, an effort that, by its very nature, cannot be undertaken by a single country

The future framework in India

  1. The focus on democracy is particularly important with respect to a third issue: the increasing role of technology in our daily lives
  2. This debate has come to the fore recently, with the long-running conflict over Aadhaar, and the draft DNA Profiling Bill
  3. The relationship between technology and human freedoms will be vital in the future
  4. It is therefore particularly interesting that through the evolving concept of “technological sovereignty”, DiEM25 has drawn a specific link between technology and democracy, which can help us think through contemporary issues such as platform monopolies, the ubiquity of AI in public decision-making (including on public welfare), etc

Way forward: A new international regime

  1. There has been a talk about an international progressive movement that mobilizes behind a vision of shared prosperity, security and dignity for all people, and that addresses the massive global inequality that exists, not only in wealth but in political power
  2. Movements such as DiEM25, which have sprung up in various parts of the world, serve as potential blueprints and models for what a “progressive international” may look like
  3. It is a conversation that progressive movements in India must take heed of, and engage with if we are to adequately address the transnational problems that face us today
WTO and India

World Customs Organization’s regional meet takes off in JaipurIOCR


Mains Paper 2: IR | Important International institutions, agencies & fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: WCO and its mandate

Mains level: Role of WCO in global trade


WCO Meet

  • A four-day regional meeting of the World Customs Organisation began at Jaipur with representatives of 33 member countries of Asia attending it.

Highlights of the meet

  1. The meeting is slated to deliberate upon various issues including the steps required for the capacity building and reforms in customs.
  2. The participants would also discuss and deliberate upon the amended Kyoto Convention (no way related to Kyoto Protocol of UNFCCC), digital customs, e-commerce among other issues,
  3. A summary of various efforts made by the National Trade Facilitation Committee for trade facilitation would also be tabled in the meeting.

About World Customs Organisation

  1. The World Customs Organization (WCO) is an intergovernmental organization headquartered in Brussels, Belgium.
  2. The WCO was established in 1952 as the Customs Co-operation Council (CCC) is an independent intergovernmental body whose mission is to enhance the effectiveness and efficiency of Customs administrations.
  3. The WCO maintains the international Harmonized System (HS) goods nomenclature, and administers the technical aspects of the WTO Agreements on Customs Valuation and Rules of Origin.
  4. The WCO is noted for its work in areas covering combating counterfeiting in support of IPR, drugs enforcement, illegal weapons trading, integrity promotion, and delivering sustainable capacity building to assist with customs reforms and modernization.
  5. In order to achieve its objectives, the WCO has adopted a number of customs instruments, including :
  • International Convention on the Harmonized Commodity Description and Coding System (HS Convention) is used as the basis for customs tariffs and for the compilation of international trade statistics.
  • International Convention on the Simplification and Harmonization of Customs procedures (revised Kyoto Convention or RKC) promotes trade facilitation and effective controls through its legal provisions that detail the application of simple yet efficient procedures and also contains new and obligatory rules for its application.
  • Arusha Declaration on Customs Integrity adopted in 1993 and revised in 2003 is a non-binding instrument which provides a number of basic principles to promote integrity and combat corruption within customs administrations.
  • Columbus Program is a customs capacity building program works to promote customs modernization and implementation of their standards to secure and facilitate world trade.
WTO and India

WTO, IMF, World Bank seek ‘urgent’ international trade reformsIOCR


Mains Paper 2: IR | Important International institutions, agencies & fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: WTO

Mains level: Decline of WTO regime in global trade and prospects for India


Joint report raises concerns

  1. The World Trade Organization, International Monetary Fund and World Bank had issued an emergency call to reform the multilateral trading system as the US retreats from prior agreements.
  2. The slow pace of reforms since the early 2000s, fundamental changes in a more interconnected modern economy and the risk of trade policy reversals call for urgency to re-energize trade policy reforms.

American arrogance on rise

  1. US has harshly criticized globalism in general and questioned America’s participation in multilateral institutions like the WTO during the UNGA meeting.
  2. The fallout from the escalating US-China trade conflict led the WTO to cut its trade growth forecast.
  3. WTO also warned that a full-blown trade war would knock around 17% off global trade growth, and 1.9% off GDP growth.

Focus on E-commerce

  1. The WTO, IMF and World Bank jointly called for new rules to address the expanding role of electronic commerce along with investment and services trade in the 21st century.
  2. The opportunities provided by information technology and other fundamental changes in the global economy are yet to be reflected in modern areas of trade policy.
  3. The three institutions also advocated the more so-called use of plurilateral talks to help unblock trade negotiations that have failed to advance at the multilateral level.

Emphasis on Plurilateral Accords

  1. Plurilateral accords are deals negotiated among a group of like-minded members that are limited to certain sectors of goods or services.
  2. Such agreements are typically easier and faster to negotiate than multilateral accords, which require a consensus among the WTO’s 164 members.

Revitalizing the Dispute Settlement Mechanism

  1. The joint report urged WTO members to work together to fix the impasse in the WTO dispute settlement system, which risks paralysis due to the Trump administration’s refusal to appoint appellate body members.
  2. Over the past year the US has cited a pattern of judicial overreach at the WTO and has blocked the appointment of experts to the appellate body, which has the final say in WTO dispute rulings.
  3. If the US continues to oppose new appointments to the panel beyond December 2019, the body will not have enough panelists to sign off on rulings.
  4. The WTO will lack the ability to fully adjudicate trade disputes involving the world’s largest companies.

Try to collect  few points for:

What are the key areas of reform if the WTO has to survive in the present context of ‘Trade War’, especially keeping in mind the interest of India? (15) (CSE Mains, 2018)

WTO and India

[op-ed snap] Make the global economy work for allop-ed snap


Mains Paper 3: Economy | Effects of liberalization on the economy, changes in industrial policy & their effects on industrial growth

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: Trade war fears across the globe and its impact on economy


World economic order since WWII

  1. Since the end of World War II, a broad consensus in support of global economic integration as a force for peace and prosperity has been a pillar of the international order
  2. Since the fall of the Berlin Wall a generation ago, the power of markets in promoting economic progress has been universally recognized
  3. From global trade agreements to the European Union project; from the Bretton Woods institutions to the removal of pervasive capital controls; from expanded foreign direct investment to increased flows of peoples across borders, the direction has been clear
  4. The world has grown smaller and more closely connected

Effect of this cohesion

  1. This has proved more successful than could reasonably have been hoped
  2. We have not seen a war between leading powers
  3. Global living standards have risen faster than at any point in history
  4. And material progress has coincided with even more rapid progress in combating hunger, empowering women, promoting literacy and extending life
  5. Every single day since 1990 there were an average of 108,000 fewer people in extreme poverty
  6. Since the beginning of the 21st century, global life expectancy has increased by more than four months a year

Looming fears of a trade war

  1. A backlash against the current paradigm of global integration is reshaping politics and economic policy in a way that may plague us for years
  2. The momentum toward global economic integration was stopped when the US repudiated the Trans-Pacific Partnership
  3. Worries of a trade war between the US, China and other countries have materialized, leaving a wide range of industries and countries anticipating substantial losses
  4. The International Monetary Fund estimates that rising trade tensions between the US and the rest of the world could cost the global economy 0.5% of gross domestic product (GDP), or $430 billion, by 2020

What is this trade war leading to?

  1. The shift away from openness extends to immigration and capital flows as well
  2. The EU, notable for its commitment to the free movement of people, is shifting toward much tougher immigration policies
  3. New immigration policies in the US have turned police officers into immigration-enforcement agents and hurt business growth
  4. Restrictions on foreign investment have been increasingly common
  5. The US has taken to blocking Chinese investments, China has set unfair terms for US companies wishing to invest there, and Europe has increasingly favoured domestic companies over foreign competitors

Reasons for the backlash against openness

  1. The backlash against global integration has many sources
  2. Some of it reflects broader economic frustrations associated with slower growth and rising inequality
  3. Some reflect the difficulties of maintaining harmony within multi-ethnic societies
  4. Most important is the growing suspicion on the part of electorates that globalization is an elite project that primarily benefits elites
  5. Somehow branches for financial institutions in foreign countries seem to be a higher priority than protections for displaced workers
  6. The protection of the intellectual property of global corporations is a more focal concern than preventing unfair competition from foreign companies that escape regulation

Ways of promoting global integration

  1. There should be major cooperative efforts to prevent global corporations from avoiding taxes
  2. Crackdowns on regulatory arbitrage, and
  3. Stronger domestic programmes to cushion the impact of structural changes on individual workers

Way Forward

  1. Political leaders must connect global integration with tangible benefits for middle-class citizens
  2. They must show that international cooperation helps to prevent exploitation of ordinary citizens by elites
  3. Electorates should be assured that adequate social protections are in place so that those who must adjust to economic change are protected
WTO and India

[op-ed snap] The problem at the WTOop-ed snap


Mains Paper 2: IR | Important International institutions, agencies & fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: WTO

Mains level:  WTO dispute settlement mechanism and its importance in world trade


Trade wars & changing WTO

  1. Adherence to the rules of an international trade organisation was expected to serve as an important domestic incentive (and imperative) for governments by allowing them to resist protectionist demands and provide for greater legal certainty
  2. The U.S. drove the agenda to establish the World Trade Organisation (WTO) purely to pursue its own commercial interests
  3. The U.S. has been long proven isolationist and has never truly embraced the idea of a multilateral system in which its leadership could be contested
  4. A closer look at the Doha round of trade negotiations shows that the U.S. may well have consciously (or not) destroyed the negotiation process in formulating excessive demands that no country was prepared to meet
  5. The current crisis with the WTO dispute settlement system does not come as a surprise. In trade wars, the objective is not to settle a dispute; it is to win the battle

What’s the issue?

  1. The U.S. has systematically blocked the appointment of new Appellate Body members (“judges”) and de facto impeded the work of the WTO appeal mechanism
  2. With only four working members out of seven normally serving office in July 2018, the institution is under great stress
  3. If no appointment is made, it will simply be destroyed by December 2019, with only one remaining member to tackle a massive number of disputes that are also increasingly hypertechnical
  4. Other WTO members are expressing concerns over the politicisation of the Appellate Body appointment and reappointment process; and the quasi-attribution of permanent Appellate Body seats to the U.S. and the European Union (EU)
  5. There is concern that China may be on its way to having a permanent seat

Resolving the issue

  1. Since its accession to the Organisation, in 2001, and despite an extremely demanding protocol of accession designed by the U.S. and the EU to literally constrain its emerging power and limit the impact of its commercial domination on their own economies, China has largely benefited from the rules-based WTO system
  2. China has accumulated a vast experience close to that of the U.S. or Europe
  3. China now claims to hold the legitimacy to take the lead in WTO matters
  4. The recent EU-China proposal to promote the reform of the WTO is said to combat “unilateralism and protectionism”

Way Forward

  1. The world has changed and multilateral institutions now have to embed these changes
  2. Today’s WTO crisis might well be the last ditch battle to retain control over a Western-centric organisation
  3. The time has come for the emerging economies and the developing world to have a greater say in how to shape multilateralism and its institutions
WTO and India

[op-ed snap] WTO may unmask India’s split personalityop-ed snap


Mains Paper 2: IR | Effect of policies & politics of developed & developing countries on India’s interests, Indian diaspora

From UPSC perspective, the following things are important:

Prelims level: Agreement on Subsidies and Countervailing Measures (ASCM), WTO

Mains level: India’s GDP growth and its impact on benefits India has been getting as a developing nation at WTO


India at WTO

  1. Most countries are melting pots and, therefore, incapable of throwing up a singular, distinctive trait
  2. India has long been suspected of harbouring dual personalities
  3. The sharp social and income divides—with a handful of global billionaires on one side and millions trapped in abject poverty on the other—or the dialectic between the nation’s Constitution-based democratic traditions and an emergent autocracy, are seen as symptoms of the nation’s conflicted personality

US complaints against India

  1. The US, the world’s trade malcontent, is pointing out India’s flawed persona at WTO
  2. The danger is that the blame might stick this time
  3. The US has complained to the WTO’s dispute settlement body about India’s export-related subsidies
  4. The complaints are about five specific schemes:
  • export-oriented units scheme and sector-specific schemes, including the electronics hardware technology parks scheme
  • the merchandise exports from India scheme
  • the export promotion capital goods scheme
  • special economic zones
  • the duty-free imports for exporters programme

Basis of the complaints

  1. The US contends that India’s export-related subsidies are inconsistent with the WTO’s Agreement on Subsidies and Countervailing Measures (ASCM), specifically Section 3 that bars export-related subsidies
  2. Annexure-VII of the same agreement provides a list of developing countries, including India, that cannot escape the provisions when their per capita gross national product (GNP) crosses $1,000
  3. India’s per capita GNP crossed $1,000 sometime ago
  4. According to CEIC Data, India’s GNP per capita was $1,978 in 2017

India’s preparations for an adverse verdict

  1. India is not strategically prepared for the consequences—specifically in terms of alternative mechanisms to boost exports without subsidies
  2. The special economic zone (SEZ) policy, for example, is clearly not WTO compliant, but there is no alternative scheme yet
  3. India wants to achieve “a quantum jump in exports” through procedural stuff like digitization of ports or fewer tariff notifications
  4. There is a need for a massive structural overhaul that can wean exporters off certain subsidies without affecting export performance

Way Forward

  1. There is an intricate skein of moral and legal issues surrounding the dispute
  2. On the moral plane, the US is resorting to what is known in development literature as “kicking away the ladder”—having extensively used similar benefits on its path to development, it now attempts to prevent other developing countries from catching up
  3. On the legal side, India is likely to get some breathing time before dismantling the edifice of export-related subsidies
  4. India’s export growth—and hence GDP growth—faces many obstacles and it needs a strategic framework that can look and plan ahead
WTO and India

Commerce ministry sets up panel to make SEZ policy compatible with WTO rules


From UPSC perspective, the following things are important :

Prelims level : MAT, SEZ Policy (2005), Propositions of the new rules

Mains level : US has been consistently dragging India at WTO against various subsidies offered by it. The panel so set is a small move to put forth India’s genuine interests protecting its domestic exporters.


Mains Paper 3: Indian Economy| Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.

From UPSC perspective, the following things are important:

Prelims level: MAT, SEZ Policy (2005), Propositions of the new rules

Mains level:  US has been consistently dragging India at WTO against various subsidies offered by it. The panel so set is a small move to put forth India’s genuine interests protecting its domestic exporters.


Defending the Export Subsidy

  1. India argues that it should not be singled out just because it is growing faster, and should be given a chance to phase out export subsidies over a period of eight years, as was the case with other countries.
  2. The commerce ministry has set up a committee headed by Bharat Forge chairman Baba Kalyani to make its special economic zone (SEZ) policy compatible with WTO rules after the US challenged India’s export subsidy programme at the multilateral trade body.
  3. The commerce ministry has been consistently lobbying with the finance ministry to exempt units in the SEZs from the minimum alternate tax, or MAT, imposed on them in 2011.

The US Challenge

  1. The US on 14 March challenged almost India’s entire export subsidy regime in the WTO including:
  • merchandise exports from India scheme
  • export oriented units scheme and sector specific schemes,
  • including electronics hardware technology parks scheme;
  • special economic zones;
  • export promotion capital goods scheme and
  • Duty-free imports programme for exporters.
  1. Both sides engaged in consultations but failed to resolve the matter bilaterally.
  2. The WTO has even set up a dispute panel to give its verdict on the matter.


India’s SEZ Policy

  1. The Special Economic Zones Act, 2005, was passed by Parliament in May, 2005.
  2. After extensive consultations, the SEZ Act, 2005, supported by SEZ Rules, came into effect in, 2006, providing for drastic simplification of procedures and for single window clearance on matters relating to central as well as state governments.
  3. The main objectives of the SEZ Act are:
  • generation of additional economic activity
  • promotion of exports of goods and services
  • promotion of investment from domestic and foreign sources
  • creation of employment opportunities
  • development of infrastructure facilities
  1. The SEZ Rules provide for different minimum land requirement for different class of SEZs. Every SEZ is divided into a processing area where alone the SEZ units would come up and the non-processing area where the supporting infrastructure is to be created.
  2. The functioning of the SEZs is governed by a three tier administrative set up. The Board of Approval is the apex body and is headed by the Secretary, Department of Commerce.
WTO and India

India’s curbs on import of pulses: US, Australia, EU raise concerns at WTO


Mains Paper 2: IR | Important International institutions, agencies & fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: World Trade Organization (WTO), quantitative restrictions

Mains level: India’s status as importer/exporter and effects of its decisions on domestic as well as global economy

Opposing India’s move to curb imports

  1. Members of the World Trade Organization (WTO) including the US, Canada, Australia, European Union and Japan have raised concern over India’s quantitative restrictions on the import of pulses
  2. India capped imports of green gram (moong), black matpe (urad) and pigeon peas (arhar) in August in the wake of domestic harvest and concerns over the slump in prices of traditional pulses
  3. India’s decisions in November to raise import duties on pulses by up to 50% and put stringent fumigation requirements have also irked pulse exporting countries

Allegations on India

  1. Quantitative restrictions by India on the import of pulses distort global prices and put the future of farmers across many countries in peril
  2. This is because India has been the largest producer, as well as traditionally the largest importer of pulses to ensure a steady supply of the protein-rich diet to its citizens

WTO provisions

  1. WTO mandates elimination of quantitative restrictions covering all import- and export-related measures
  2. Exceptions are allowed under specific circumstances such as to:
  • safeguard the balance of payments
  • to protect an industry at an early stage of development or
  • to prevent sudden increases in imports
WTO and India

Members reaffirm support to WTO at informal ministerial


Mains Paper 2: IR | Important International institutions, agencies & fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: WTO, Buenos Aires ministerial, Doha Development Agenda (DDA)

Mains level: Rising protectionism across world and threats for India

Informal ministerial of the World Trade Organization

  1. An informal ministerial of the World Trade Organization (WTO) is being organized by India
  2. The move comes barely three months after the Buenos Aires ministerial collapsed over issues such as the role of the WTO as a multilateral trading body
  3. The informal ministerial unanimously reaffirmed commitment to preserving a rule-based, multilateral trading system that the WTO represents

Why this move?

  1. The US recently slapped a tariff on its imports of steel and aluminum and hinted at more such protectionist steps
  2. It has also dragged India to the WTO over the latter’s export subsidy programmes, alleging these are hurting US companies
  3. Growing unilateral protectionist policies by the US and some other countries have worsened fears of an escalating global trade war

India’s stance on various issues at the WTO

  1. India called for respecting mandates and decisions made at earlier ministerial, including the Doha Development Agenda (DDA)
  2. It pushed for preserving the mandate of special and differential treatment to poor and developing nations
  3. Special treatment allows longer time frames to such nations than their developed counterparts to implement a particular trade agenda, among other facilities
  4. India has been calling for the need for developed nations to cut their massive trade-distorting farm subsidies


Doha Development Agenda (DDA)

  1. The Doha Development Round or Doha Development Agenda (DDA) is the latest trade-negotiation round of the World Trade Organization (WTO) which commenced in November 2001
  2. Its objective was to lower trade barriers around the world and thus facilitate increased global trade
  3. The most significant differences are between developed nations led by the European Union (EU), the United States (US), Canada, and Japan and the major developing countries led and represented mainly by India, Brazil, China, and South Africa
  4. Doha Round talks are overseen by the Trade Negotiations Committee (TNC), whose chair is the WTO’s director-general
WTO and India

U.S. challenges India’s export subsidies at WTO


Mains Paper 2: IR | Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: Targeted Schemes

Mains level: Reason behind this challenge against Indian Subsidies.


US challenges India’s export subsidies

  1. The US has challenged India’s export subsidy programmes at the WTO
  2. The US had requested dispute settlement consultations with the Government of India at WTO on the issue
  3. It is different: Unlike the many trade disputes between India and America that are sector specific or product specific,
  4. the new move is broad and sweeping in targeting the whole range of Indian export subsidy programmes

Targeted Schemes

  1. A statement from the (United States Trade Representative)USTR has listed
    (1) the Merchandise Exports from India Scheme;
    (2) Export Oriented Units Scheme and sector specific schemes, including Electronics Hardware Technology Parks Scheme;
    (3) Special Economic Zones;
    (4) Export Promotion Capital Goods Scheme, and a duty free imports for exporters programme
    as distorting trade in a way that allows Indian exporters “to sell their goods more cheaply to the detriment of American workers and manufacturers”

Argument against India

  1. According to the US, the above export subsidy programmes harm American workers by creating an uneven playing field on which they must compete
WTO and India

Why India opposed deal to end fisheries subsidies at WTO

Image source


Mains Paper 2: IR | Important International institutions, agencies & fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: WTO, Exclusive Economic Zone

Mains level: Pending issue of subsidies and WTO and its effects on India

Collapse of WTO talks on fisheries subsidies

  1. India’s opposition to a proposed agreement to end fisheries subsidies at the World Trade Organization (WTO) meeting in Buenos Aires led to a collapse of the negotiations
  2. It may be linked to a potential adverse political fallout in India’s coastal states

Decision at the WTO’s 11th ministerial conference (MC11)

  1. The 164 member countries of the multilateral trade body could only finalize a work programme on fisheries subsidies to finalize a deal by 2019
  2. India opposed any interim deal to restrict illegal, unreported and unregulated (IUU) fishing
  3. India did not agree to an interim outcome as many elements concerning interests of developing countries were not defined clearly

What did India want?

  1. Since countries have territorial sovereignty till EEZ (Exclusive Economic Zone), according to international rules, India insisted to protect its fishing rights till that point
  2. Initially, India had proposed special and differential treatment for its artisanal fishermen that would have allowed it to continue to supply fuel subsidy within the territorial waters, which is within 12 nautical miles from the coast
  3. It subsequently changed its stand, demanding a carve-out for all of its fishermen allowing them to fish till the EEZ, which is 200 nautical miles from the coast

Why the opposition to fisheries subsidies?

  1. Developed countries claim that fisheries subsidies, estimated to be in tens of billions of dollars annually, create significant distortions in global fish markets
  2. These are a major factor contributing to overfishing and overcapacity and the depletion of fishes
  3. A deal is mostly targeted at China, which is the largest catcher and exporter of fish and provides huge domestic subsidy to its fishermen

Counter-argument by developing countries

  1. Developing countries such as India want to protect subsidies for low-income, resource-poor fishermen for whom it is a matter of livelihood
  2. India is a distant seventh among top fish exporters and does not indulge in IUU fishing
WTO and India

[op-ed snap] The decline of the WTOop-ed snap


Mains Paper 2: IR | Important International institutions, agencies & fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: WTO ministerial meet, European Union, Trade Facilitation Agreement, Doha Development Agenda, BRICS, Dispute resolution mechanism, Trans-Pacific Partnership, North Atlantic Free Trade Agreement, Silk Route

Mains level: Decline of western hegemony in global trade and prospects for India


  1. Trade ministers from around the world attended the once-in-two-years World Trade Organization (WTO) ministerial in Argentina earlier this month
  2. They deliberated on several crucial issues that will impact the multilateral system of global trade

Changes since last ministerial

  1. Britain is entirely free of the European Union (EU) agenda and has a huge interest in building a robust multilateral trading system
  2. The US has stated repeatedly that the WTO multilateral system does not put US interests paramount and is not something that will have its support

Previous rounds of ministerial meetings

  1. These have resulted in very little progress
  2. Trade Facilitation Agreement passed at the Bali ministerial in 2013 was on the cards since the Doha Development Agenda in 2001 ministerial
  3. The 2015 ministerial in Nairobi did nothing much to enhance the WTO’s stature

Reasons behind  limited progress in past two decades

  1. One-sided nature of the original agreements
  2. The North-South divide
  3. The aggression of the BRICS (Brazil, Russia, India, China and South Africa) lobby on subsidies, agriculture, and food security

The dispute resolution mechanism

  1. It has been in place since the WTO’s inception in 1995 and has served its purpose well
  2. It has been widely hailed as the biggest success of the WTO
  3. The WTO dispute settlement mechanism involves consultations, panel proceedings, appellate body proceedings, and implementation and enforcement
  4. The panel report, or, in the case of an appeal, the appellate body report and the panel report, is adopted by the DSB
  5. After the adoption of the reports, the respondent, if found to be in breach of WTO law, has to implement the recommendations and rulings adopted by the DSB, which comprises all WTO members

USA a reluctant participant

  1. The US has always been a reluctant participant in the WTO dispute resolution process
  2. Its record also reflects patchy compliance with WTO decisions by the US
  3. Now, in what could prove to be a body blow to the entire system, the US has refused to participate in the appointment of new judges to the appellate body
  4. Members are usually appointed by consensus, and the US is a major participant
  5. This new approach of systematically diminishing the appellate body will put an end to the DSB

‘America First’ harmful to global trade

  1. Scrapping the Trans-Pacific Partnership agreement, undermining the North Atlantic Free Trade Agreement and now slowly dismantling the working parts of the WTO system, will have long-term effects on global trade

Way forward

  1. Dreamers speak of the original Silk Route that ran from Japan to the Mediterranean Sea and history may repeat itself
  2. Global trade is no longer going to have the leadership from the Western world that it did
  3. The pendulum of global trade is swinging from the richest nations to the most populous ones
  4. China, India, Brazil, and Russia should fill this void
WTO and India

Food security: time to move to cash transfersop-ed snap




Mains paper 3:Indian Economy|Issues related to direct and indirect farm subsidies and minimum support prices

From UPSC perspective, the following things are important:

Prelims level: Bali conference, Peace clause

Mains level: PDS transfer vs Cash subsidy (the never ending debate!)


The impasse at the recently concluded 11th ministerial conference of the World Trade Organization (WTO) in Buenos Aires is casting doubts over the future of developing countries’ food procurement programmes

What is a bone of contention?

  1. US allegedly reneged on its promise to not block food stockholding policies in return for India, the country with the world’s biggest stockholding programme, signing the trade and facilitation agreement (TFA).
  2. US support is important because India’s Food Security Act, passed in 2013, ran into WTO rules that keep a country’s domestic policies from distorting international trade.
  3. The law forced a significant ramping up of food procurement by the government to provide coverage to two-thirds of its population. Simultaneously, the government supports farmers through minimum support prices.
  4. The cost of these programmes—basically a country’s food subsidy bill—says the WTO, must not exceed 10% of the value of production based on the reference price of 1986-88.
  5. At the Bali conference in December 2013, India secured a ‘peace clause’ that protected it from legal action should it breach the 10% limit.
  6. However, the concession was limited to programmes running in 2013 and it comes with onerous reporting requirements about food subsidy levels.

Why is India complaining?

  1. Given that food subsidy is calculated at 1986-88 prices, many countries are limited to less than 10% of production in practice on account of inflation.
  2. Due to the obligation to reduce trade-distorting subsidies, rich countries have redesigned their programmes to give unconditional cash transfers to farmers—a policy that does distort trade by lowering international prices.


Cash transfer as a model for delivering food subsidy in India

(a) Rationale

  1. India’s current food and farmer support programme is distortionary, leaky and unsustainable.
  2. If the currency appreciates or either one of MSP or procurement increases, India could breach its 10% limit and face hostile litigation by other countries for violating WTO rules.
  3. It is, perhaps, wise to keep our food-support schemes under WTO-prescribed limits and gradually transition to a cash-based transfer for both consumers and farmers.
  4. That way, we will preserve our political capital for other issues like trade rules on electronic commerce, services trade, fisheries and the TFA.
  5. India can utilize this situation to make a virtue out of a necessity. Government policies have increased bank account coverage to 99% of households, and more than 90% of adults are linked to the UID scheme, Aadhaar.
  6. A move to cash transfers, for both consumers and producers, is more practical today than it was four years ago.
  7. Cash transfer provides beneficiaries flexibility as well as convenience and choice in terms of quality of food;
  8. Cash transfer allows them to buy better quality grains than what they got through the PDS or could diversify their diet by adding dairy products or local grains                                                                                                                                                                                                                                                                                                       (b) Challenges
  1. cash-transfer pilot in three Union territories, conducted from January 2016, showed that 20% of the beneficiaries reported not receiving the transfer, even though the government reported 99% success.
  2. Beneficiaries spent more time and money in obtaining the cash and food from the market. Also, grievance redressal mechanisms are inadequate.

Way Forward

  1. The op-ed therefore, favours a choice-based transition to cash transfers so that people continue to have the option to remain in the present system until they’re comfortable with the quality of implementation in their region.
  2. This could continue for a couple of years after the capability of starting universal cash transfers is achieved.


WTO and India

119 nations back move to remove barriers limiting women’s participation in trade


Mains Paper 2: IR | Important International institutions, agencies & fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: Buenos Aires Declaration on Women and Trade, WTO

Mains level: Efforts across world for Women empowerment

Buenos Aires Declaration on Women and Trade

  1. Nearly three-fourths of the 164-member World Trade Organisation (WTO) have supported a declaration seeking women’s economic empowerment by expeditiously removing barriers to trade
  2. India stayed away from declaration, opposing the linking of gender and trade and said that such issues should be discussed outside WTO

What will declaration do?

  1. WTO members and observers supporting the Declaration have specifically agreed to explore and find ways to best tackle women’s general lack of access to trade financing and sub-optimal participation of women in public procurement markets
  2. Inclusion of women-led businesses, in particular, small firms in value chains has also been identified as a theme related to trade and the economic empowerment of women

Reasoning behind India’s stand

  1. Agreeing to the proposition to link gender and trade could lead to advanced countries using their high standards in gender-related policies to curb exports from the developing world
  2. This could also indirectly restrict developing countries from incentivizing their women citizens as part of measures to address developmental challenges
  3. Discussing such issues at WTO will set a precedent to bring in other non-trade issues such as labour and environment standards into the WTO’s ambit
WTO and India

No WTO deal without food security: India


Mains Paper 2: IR | Important International institutions, agencies & fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: WTO, WTO Ministerial Conference, Doha Round of negotiations, Trade Facilitation in Services (TFS) Agreement

Mains level: Issues related to food security and WTO agreements


Issue of public stockholding crucial

  1. India has said it cannot envisage any negotiated outcome, at the ongoing meeting of the World Trade Organisation’s apex decision-making body, which does not include successful resolution of the food security right issue
  2. At the Plenary Session of the WTO Ministerial Conference (MC), India’s commerce and industry minister said the permanent solution for public stockholding for food security purposes is a matter of survival for 800 million hungry and undernourished people in the world

What does India want?

  1. India wants the WTO membership to re-endorse the centrality of development (the agenda to improve the trading prospects of developing nations) in WTO negotiations without creating new sub-categories of countries
  2. This is in the context of attempts by certain rich countries to wreck the broad unity among developing nations on a host of issues
  3. Developed countries such as U.S. have suggested that countries such as India and China are currently emerging economies and reasonably strong in trade — unlike others in the developing world
  4. Therefore, such powerful nations that are still in the ‘developing’ category do not deserve to gain from the favorable treatment meant only for developing nations in WTO Agreements

‘No’ to ‘new issues’

  1. India opposed the endeavor of certain countries to include ‘new issues’ — such as e-commerce, investment facilitation and matters relating to small firms — in the ongoing Doha Round of negotiations
  2. The Minister also pushed India’s proposal for a Trade Facilitation in Services (TFS) Agreement, which, among other things, aims to liberalize rules on movement of professionals and skilled workers across borders for temporary work/projects
WTO and India

[op-ed snap] Crunch time at WTOop-ed snap

Image Source


Mains Paper 2: IR | Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.

From UPSC perspective, the following things are important:

Prelims level: Issues related to the WTO(read the attached story)

Mains level: Upcoming challenges in the WTO’s meeting


The proposals trade ministers will consider WTO’s 11th biennial Ministerial Conference(in Buenos)

  1. Notable among the proposals trade ministers will consider are those relating to new rules on farm subsidies, the elimination of support for unsustainable fisheries, and the regulation of e-commerce
    Joint Proposals by India and China
  2. With the backing of more than 100 countries, a joint proposal from India and China to eliminate the most trade-distorting farm subsidies worth $160 billion in several industrialised economies
  3. It is arguably the most contentious agenda item at the Ministerial
  4. The two countries see this as a prerequisite to address the prevailing imbalance in the Agreement on Agriculture, which unfairly benefits developed countries

Cautions regarding the joint proposals 

  1. But host Argentina has cautioned that the joint proposal could potentially unravel negotiations

Dispute regarding subsidies and G-33 coalition

  1. The other major dispute centres on finding a so-called permanent solution to the large subsidies that underpin public stock-holding programmes to bolster food security in the developing world
  2. The G-33 coalition, which includes Indonesia, China and India, seeks a complete exemption from commitments to reduce subsidies, such as minimum support prices, from this poverty-alleviation programme
    Support from EU and Brazil
  3. The EU and Brazil have expressed broad support for the G-33 coalition’s position on public stock-holding programmes
  4. But in return they seek agreement on their own proposal to reduce trade-distorting subsidies on a percentage basis, in both advanced and developing economies

A new issue created by the US

  1. The US has been exploring an alternative, unilateral route away from the formal dispute resolution mechanism of the Geneva-based body to settle perceived and real trade conflicts with partners
  2. It has blocked fresh appointments to fill vacancies on the seven-member WTO appellate body
  3. The risk of Mr. Trump’s protectionist rhetoric translating into economic barriers remains real
  4. Trade leaders gathered in Buenos Aires can ill-afford to lose sight of this imperative
WTO and India

WTO: diverse views fuel bleak prospect for outcomes


Mains Paper 2: IR | Important International institutions, agencies & fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: WTO, Doha Round negotiations, Special Safeguard Mechanism, Aggregate Measurement of Support (AMS), G-33, South Centre

Mains level: WTO mandate and its effect on India’s interests

World Trade Organisation’s (WTO) Buenos Aires meeting commenced

  1. Amid concerns on support for anti-globalisation, protectionism and bilateralism, World Trade Organisation’s (WTO) Buenos Aires meeting commenced on 10th December
  2. A vast majority of the 164 WTO member nations — led by India, China and South Africa — are learnt to be demanding that the final declaration of the WTO’s highest decision-making body reaffirms commitment to multilateralism and rules-based trading system

No substantial outcome expected

  1. This might be due to the divergent views of the WTO members on several issues, including the outstanding ones in the ongoing Doha Round negotiations
  2. Countries, mostly from the developed world, want what they call the ‘21st century trade issues’ — such as e-commerce, investment facilitation, matters relating to small firms and gender equality — to be discussed for rule-making to enhance the relevance of the WTO
  3. India, and several countries mainly from the developing world, are against introduction of such ‘new issues’ into the Doha Round

A separate work programme

  1. Owing to persistent differences, it is likely to be decided that issues such as ‘Special Safeguard Mechanism’, ‘limiting harmful fisheries subsidies’, ‘possible negotiations on e-commerce’, as well as ‘services trade facilitation’ will be addressed through separate ‘work programme(s)’ post Buenos Aires
  2. India, China and South Africa have the support of around 120 WTO member nations on the issue of continuation of the ‘development’ mandate of the Doha Round without any dilution
  3. This support also applies to India’s joint proposal with China — asking the developed nations to eliminate the most trade-distorting form of farm subsidies, known in WTO jargon as Aggregate Measurement of Support (AMS)

India’s stand

  1. On agricultural issues including the ‘permanent solution’ and SSM, India is working with G-33 (a group of 47 nations)
  2. India had made it clear that it would not accept a ‘permanent solution’ with onerous conditions that in turn make it tough for the Indian government or other developing countries as well to meet the food security needs of their people
  3. To get wide support on India’s interests, commerce minister also met with the South Centre, an intergovernmental organisation of developing nations


Know all about WTO here

WTO and India

India opposes e-commerce talks at WTO; submits document


Mains Paper 2 : Global groupings and agreements involving India and/or affecting India’s interests
Prelims level: Not much
Mains level: India’s stand on e-commerce in WTO

  1. India has for the first time submitted a formal document opposing any negotiations on e-commerce at the World Trade Organisation (WTO).
  2. The submission comes ahead of the key ministerial conference of the WTO next week.

India’s Stand

  1. The country has said that it would “continue the work under the Work Programme on electronic commerce… based on the existing mandate and guidelines.
  2. India has maintained that e-commerce per se may be good for development
  3. But it may not be prudent to begin talks since many countries don’t fully understand the implications of negotiating binding rules.
  4. India also asked the General Council for periodic reviews based on reports made by agencies responsible for implementation of the work programme.
Work Programme on Electronic Commerce
  1. E-commerce entered the WTO in 1998, when member countries agreed not to impose customs duties on electronic transmissions.
  2. the moratorium has been extended periodically.
Stand of Other Countries
  1. The United States last year floated a proposal on e-commerce
  •   prohibiting digital customs duties,
  •   enabling cross-border data flows,
  • promoting a free and open internet and
  •  preventing localisation barriers
  1. China wants easier norms for goods ordered over the internet but physically delivered.
  2. Some countries want to convert this temporary moratorium on customs duty on electronic transmissions into a permanent one.
Adverse effect of Permanent Moratorium
  1. Considerable leakage of revenue as more products and services get delivered through electronic transmissions.
  2. Manufacturing through 3-D printing in absence of customs duty could have severe adverse impact on the domestic manufacturing sector.
WTO and India

Tread carefully on fishery subsidies in WTO: CWS to government 


Mains Paper3: Issues related to direct and indirect farm subsidies and minimum support prices.
The following things are important from UPSC perspective:

Prelims Level: WTO, EEZ, Uruguay Round

Mains level: The news card discusses the working paper by CWS which cautions India to be vigilant while taking obligations on the subsidies it gives
to its fisheries sector.



  • Ahead of the key ministerial meeting of the World Trade Organisation (WTO), a government think tank has cautioned India to be vigilant while taking any obligations on the subsidies it gives to its fisheries sector as it may end up curtailing the country flexibility to fish in its own waters.
  • Citing fish and two of its byproducts – fish oil and fish meal – as having high global demand for use in pharmaceuticals and anti-biotics, respectively, New Delhi-based Centre for WTO Studies (CWS) in a working paper has said that the disciplines on fishery subsidies have a market access agenda and a clear commercial interest of selected developed countries.


  • The paper comes at a time when India and some other developing countries are fighting to give fuel subsidies to their small and resource-poor fish workers in the proposed global agreement to prohibit subsidies to vessels engaged in illegal, unreported and unregulated (IUU) fishing in its exclusive economic zone (EEZ).
  • EEZ is the sea zone extending up to 200 nautical miles from the shore and governed by the central government.

Key Highlights from CWS Working Paper

  1. An agreement on fisheries without exempting developing countries will restrict their flexibility to trade in fish and its byproducts.
  2. As per the paper, the global fish meal and fish oil market is projected to reach $14.28 billion by 2022.
  3. Also, the binding rules on fisheries management have been enunciated under the United Nations Convention on the Law of the Sea andthe UN Fish Stocks Agreement.
  4.  Besides, non-binding obligations on fisheries management are entailed under the Food and Agriculture Organization.
  5. The countries need to be vigilant as IUU measures should not be a disguised restriction to international trade.

Concerns regarding Agreement on Fishery Subsidies

  1. An agreement on fishery subsidies will ensure that there is no competition from developing countries.
  2.  Developing countries wouldn't be able to exploit their own resources because they won't have the capacity to do so.
  3.  Therefore, developing countries need to ensure that the history of the imbalance suffered from the disciplines on agriculture subsidies during the Uruguay round is not repeated in fisheries subsidies.
WTO and India

WTO: India sounds warning over food security clause


Mains Paper3: Issues related to direct and indirect farm subsidies and minimum support prices.

The following things are important from UPSC perspective:

Prelims: G33, Peace Clause, WTO

Mains level: Peace Clause has been in the news since Bali ministerial conference, 2013 and is an important topic for the Mains.



  • India’s WTO ambassador J.S. Deepak warned of a “spectacular failure” at the forthcoming Buenos Aires trade ministers’ conference if countries fail to deliver a credible “permanent solution” on public stockholding (PSH) programmes.

India’s demands regarding Permanent Solution on PSH

  1. Trade ministers had mandated WTO to conclude the permanent solution for PSH programmes by the 11th ministerial meeting that begins on 10 December.
  2. The permanent solution has to be “an improvement” over the existing perpetual peace clause that was concluded at the World Trade Organization’s (WTO’s) ninth ministerial conference in December 2013 in Bali, which was further clarified by the WTO General Council in November 2014.
  3. India, which is a member of the G33 coalition of more than 45 countries including China, remains concerned about “the excessively stringent transparency requirements and safeguard being proposed” by some opponents.
  4. India said the permanent solution has to provide legal permanence through amendment of WTO rules.
  5. Also, the mandate for a permanent solution on PSH flows from ministerial decisions and has no link whatsoever with the negotiations on domestic support.

Joint Proposal by Norway and Singapore

  1. India is prepared to consider reasonable transparency provisions that are implementable by developing countries, it will not accept onerous conditions for safeguards as proposed in a joint proposal by Norway and Singapore.
  2. The transparency conditions includes-
  • Informing WTO about “exceeding or risk of exceeding” the agreement measurement of support or most trade-distorting farm subsidy limits;
  • Timely notification of domestic subsidies;
  • Information about breaches if any on a post-ante basis; and prompt notification of statistical information.
  1. The proposal listed two “anti-circumvention/transparency” conditions for instance India and other developing countries must ensure that “stocks procured under such (PSH) programmes do not distort trade or adversely affect the food security of other members.
  2. Further, India and other beneficiaries of the permanent solution must ensure that stocks procured for their PSH programmes do not enter “direct or indirect exports”, Norway and Singapore maintained.

Views of various countries regarding Permanent Solution on PSH

  1. Indonesia, on behalf of the G33 coalition, said, the establishment of a permanent solution on PSH for all developing members and accessible, simple and effective SSM remain priority for the Group.
  2. China said the Buenos Aires meeting must deliver a simple and effective permanent solution without onerous conditions.
  3. At the informal meeting, the opponents of an easy and effective permanent solution for PSH programmes such as the European Union, Brazil, Australia and Pakistan among others insisted that there must be strong transparency and safeguard conditions in the final instrument.
  4. Brazil said the permanent solution has to be part of an outcome on domestic support.
  5. The US is willing to support the permanent solution if it does not take the Bali decision backwards, implying that India must accept an outcome without any change/improvement from the December 2013 decision.

Various other issues raised by India

  1. India also issued several red lines for the Buenos Aires meeting, particularly on new issues such as “investment facilitation, disciplines for micro, small and medium enterprises, and gender”, saying they “do not have mandates in place in the WTO”.
  2. Also India cautioned that the ministerial meeting is being held at a particularly difficult time and context for WTO and it is not the opportune time to enter into contentious and divisive debates by seeking ambitious outcomes in e-commerce India cautioned at the meeting.


Peace Clause

  1. No member, can drag any developing country to Dispute settlement mechanism of WTO for violation of De-minimus limits in AoA, provided that the said developing country –
  • is paying subsidies for staple food crops for public stockholding program & food security purpose;
  • And is providing annual information of its food security Program to WTO.





WTO and India

Over 100 nations back India-China plan on farm subsidies before WTO meet

Image Source


Mains Paper 3: Agriculture | Issues related to direct and indirect farm subsidies and minimum support prices

The following things are important from UPSC perspective:

Prelims: AoA

Mains level: Issues related to AoA and PSH.


Support to India and China in the WTO

  1.  More than 100 countries have backed a joint proposal by China and India for eliminating the most trade-distorting farm subsidies of $160 billion 
  2. This huge subsidy is given in countries like the US, the European Union, Japan, Canada, Norway, and Switzerland
  3. This proposal was given in the World Trade Organization’s 11th trade ministerial summit
  4. In their proposal, India and China said it is a prerequisite to address “the imbalance in the existing AoA (Agreement on Agriculture)
  5. In AoA only some members (the US, the EU, Japan, Canada, Switzerland, Norway and a few developing countries) have access to bound AMS(Aggregate Measurement of Support)
  6. AMS are entitlements to provide billions of dollars for most trade-distorting subsidies, which allows them much “more policy space”

India’s notice on public stock-holding (PSH)

  1. India has served notice to its the European Union, Australia, Argentina, Brazil, Paraguay and Pakistan
  2. Why: Because India will not offer any further concessions for market access or enter into trade-offs in the negotiations for a permanent solution on PSH programmes 


Agreement on Agriculture

  1. The Agreement on Agriculture (AoA) is an international treaty of the World Trade Organization
  2. It was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade, and entered into force with the establishment of the WTO on January 1, 1995

Image Source
WTO and India

India is ‘non-committal’ on market economy tag for China II

  1. Solution: To refuse China the ‘MES’, India has taken sides with the U.S. and European Union
  2. Their stand is that in ‘market economies’ where prices of items are market determined (based on demand & supply conditions)
  3. But, there is still a significant government influence in the Chinese market
  4. The intention will be to ensure India’s manufacturing sector is not hit by unfairly priced Chinese goods
  5. Several nations that have a strong manufacturing base are concerned about according MES to China
  6. While nations in Africa and Latin America — dependant on Chinese investments to boost manufacturing — are inclined to grant MES to China
WTO and India

India is ‘non-committal’ on market economy tag for China I

  1. Issue: Beijing has said WTO member countries must fulfil their promise to deem China a ‘market economy’ from Dec 2016
  2. Reason: Provisions in the ‘Protocol on the accession of China to the WTO’ in 2001
  3. But India is not inclined to automatically grant the coveted ‘Market Economy Status’ (MES) to China this Dec under WTO norms
  4. Reason: Granting MES to China will severely curb the ability of nations including India to impose anti-dumping duties on “unfairly priced” Chinese imports
  5. Of the 535 cases where anti-dumping duties were imposed by India during 1994 to 2014, a maximum of 134 has been on goods from China
WTO and India

[op-ed snap] A case for accepting the WTO rulingop-ed snap

  1. Theme: Accepting the WTO solar ruling
  2. Issue: Indian govt. policy utilized Domestic Content Requirements (DCR) to favour domestic companies for purchasing solar equipment. The US contested this policy in WTO and the WTO declared the policy illegal.
  3. Dimensions of this case: legal issues, environmental impact and India-U.S. trade relations.
  4. Legal issues: WTO prohibits discrimination against goods based on origin or destination. India tried to justify policy on 3 exceptions.
  5. First, the rule is inapplicable to govt procurement. WTO using legal precedents said that govt is procuring electricity and not solar panels.
  6. Second, WTO denied India’s contention that domestic supply was limited. WTO said that supply must be seen from all sources, not just domestic.
  7. Third, India failed to show a domestic law or international legal norm which would justify its policy.
  8. Environmental impact: the WTO ruling is not against environment or the Jawaharlal Nehru National Solar Mission (JNNSM). WTO prevents members from using trade policies to discriminate in trade matters.
  9. India-U.S. trade relations: although both countries say that they want to bring down barriers but besides this dispute, there are 4 other disputes between the two in the WTO.
  10. Such policies raise the potential for other countries to discriminate against us similarly. DCR rules would also result in high costs for solar energy. Hence, India should comply with the ruling.
WTO and India

Indian agenda for Oslo meet

  1. India is preparing to take the lead in WTO-level talks to open up global services trade
  2. Aim: Especially to ensure easier movement of skilled professionals for short-term projects overseas
  3. Services TFA: In this regard, India is working on a formal proposal to be submitted soon before the WTO on a ‘Trade Facilitation Agreement (TFA) in Services’
  4. Why Services TFA? India has a strong services sector and a huge pool of skilled professionals & would be hugely benefitted from such agreement
  5. Background: India had informally pitched for a WTO-level ‘TFA in Services’ at the Organisation for Economic Co-operation and Development ministerial council meeting in Paris in June
  6. The ‘TFA in Services’ proposal, similar to the WTO’s TFA for Goods (aimed at easing customs norms & boosting global merchandise trade), was then welcomed by Azevêdo and several trade ministers
WTO and India

Amid growing protectionism, global trade ministers to meet in Oslo

  1. What? Trade ministers from many WTO members will gather at the Norwegian capital, Oslo, in October
  2. Why? To discuss the need for further liberalisation of global trade amid growing protectionism
  3. It will also deliberate upon the WTO’s future role in the context of ‘new challenges‘ for the global trading system and some ‘troubling’ international political developments
WTO and India

India reconsiders opposition to new trade issues at WTO

  1. Reason: Understanding that it can’t keep on opposing such issues for too long
  2. New trade issues: Such as global value chain (GVC) and e-commerce
  3. Background: India has so far maintained that member-countries must conclude the long-pending Doha Development Round of the WTO before taking up any new issues for negotiations
WTO and India

WTO welcomes TFA proposal

  1. WTO has welcomed India’s proposal for a Trade Facilitation Agreement (TFA) in Services
  2. Proposal: Easier temporary movement of skilled workers to boost global services trade
  3. The proposal was reiterated during the informal meeting of trade ministers from 25 WTO member countries on the sidelines of OECD ministerial council meeting in Paris
  4. WTO also emphasised on working on Trade Facilitation in Services including Mode 4
  5. Mode 4: It pertains to temporary movement of natural persons including skilled workers
WTO and India

Need for capacity building in WTO issues

  1. Issue: There are only a few Indian law firms in trade law practice
  2. Therefore, to handle India’s trade disputes with other countries, the govt has been engaging both international and Indian law firms
  3. However is would be desirable to see an increase in the number of Indian experts
  4. Then govt can rely entirely on local firms to deal with such issues
  5. Step: Commerce ministry is trying to build capacity to comprehensively track the trade restrictive measures taken by other countries, especially those that hurt India’s exports


WTO and India

Importance of non-issues at WTO and capacity building

  1. India has been advocating that certain issues, including labour and environment, must be kept out of the WTO’s purview
  2. Instead, they should be dealt with by the global bodies concerned such as the International Labour Organisation and the United Nations Framework Convention on Climate Change
  3. However, developed countries want that the WTO should address global trade’s new challenges including labour and environment
WTO and India

Non-trade issues at WTO, lack of legal experts worry India

  1. What? Developing nations, including India, are facing a double disadvantage at WTO’s (WTO) Dispute Settlement Body (DSB)
  2. Disadvantages: Lack of a sufficient pool of trade law experts to represent them effectively and also certain efforts to bring within ambit non-trade issues such as labour and environment
  3. Non-issues: Labour and environment issues would pose a great challenge for developing nations
  4. Why? Because very often these are conditions that add as restrictions in the freedom of trade particularly for developing countries
WTO and India

India-US fight over GATS Mode 4

  1. Context: US opposed India’s proposal named “Mode 4: Assessment of Barriers” at WTO
  2. What? It aimed at a comprehensive discussion on growing regulatory barriers in the movement of natural persons under Mode 4 of GATS
  3. Ground: That India is already pursuing a trade dispute on the same issue against Washington
  4. Many developing countries strongly supported India’s proposal because it is important to address this issue for their growing services sector
WTO and India

India takes on U.S. at WTO over visa rules

  1. News: India has filed a complaint to WTO against U.S over its measures raising fees on some applicants for temporary work visas, mostly involving tech sector
  2. India’s notification: The U.S. measures are not consistent with Washington’s commitments to accept services from other countries
  3. Context: Some Indians receive unfair treatment compared with Americans in U.S in providing similar services in sectors like computer services
  4. U.S. response: The U.S. visa program, which was recently updated on a bipartisan basis by Congress, is fully consistent with our WTO obligations
  5. Indian move is unusual at the WTO, where most disputes involve goods, tariffs and restrictions, not services
WTO and India

India studying impact of market economy status for China

  1. Context: There are chances of China being granted Market Economy Status under WTO norms
  2. Background: The 2001 agreement (Protocol on the accession of China to the WTO), according to which the WTO member nations could ignore selling price and production costs in China for 15 years
  3. Impact: WTO-member countries would have to consider China as a ‘market economy’ while adjudicating anti-dumping cases
  4. Challenge: India has extensively used anti-dumping provisions to offset the losses caused to the local manufacturers due to dumping
  5. It will severely limit India’s ability to resort to anti-dumping
  6. Criticism: There is a significant govt influence in China that in turn causes distortions in international trade
WTO and India

Cabinet approves Trade Facilitation Agreement (TFA)

  1. Context: Cabinet has approved, Proposal for Notification of Commitments under the TFA of WTO
  2. Relevance: Ratification and acceptance of the Instrument of Acceptance of Protocol of TFA to the WTO Secretariat and constitution of the National Committee on Trade Facilitation (NCTF)
  3. TFA provisions: Expediting the movement, release and clearance of goods, including goods in transit
  4. Measures for: effective cooperation between customs and appropriate authorities on trade facilitation and customs compliance issues
  5. These objectives are in consonance with India’s “Ease of Doing Business” initiative
  6. Condition: TFA shall enter into force for the notified members upon acceptance by two-third WTO Members
  7. Way ahead: A NCTF would be set up under Department of Commerce
WTO and India

India to pitch for TFA in services

India will pitch for a trade facilitation agreement (TFA) in services at the WTO has huge potential and it contributes significantly to the country’s economy.

  1. TFA in services means liberalised visa regime such as multiple entry visas, visa-free travel for foreign tourists and long term visas for business community.
  2. In RCEP negotiations, India wants a comprehensive agreement in goods, services and investments.
  3. India is very strong in the services area as the sector contributes over 50 per cent in the country’s economic growth.
  4. To boost services exports, the ministry is already working on some reform measures in sectors including education and legal.
WTO and India

India to counter ‘non-issues’ at WTO talks

In Regional Comprehensive Economic Partnership (RCEP) talks, India will state that the focus should be on expeditiously concluding discussions on the goods, services and investment chapters of pact.

  1. The government is firming up a strategy to prevent ‘attempts’ by rich nations to introduce ‘new pro-corporate issues’.
  2. Such as global value chains, digital economy, labour and climate-related trade into the WTO deliberations and negotiations on mega free trade agreements.
  3. The outstanding issues include an effective ‘Special Safeguard Mechanism’ and a permanent solution for the issue of public stockholding for food security purposes.
  4. India will state at the WTO that any country pitching for the introduction the ‘new issues’ will first have to ensure that they meet two criteria.
  • To establish the relevance of these issues in the context of trade.
  • To ensure that there is a consensus among all 162 WTO member countries in taking up such an agenda.
WTO and India

India seeks to lead developing nations at WTO

A “collaborative approach” with African countries would be central to India’s future strategy at the WTO.

  1. India plans to play a leadership role at the WTO negotiations to boost the trade prospects of the developing and poor nations.
  2. To forge strong alliances on the “development agenda” of the WTO’s ongoing Doha Round of talks.
  3. Government will hold a series of “strategy workshops” of stakeholders, inter-ministerial and Centre-state discussions in addition to summits with African countries.
  4. To take a deep dive on the outstanding issues [of the ongoing Doha Development Round talks of the WTO] and come up with an initial game plan.
WTO and India

WTO discussions deadlocked

  1. India has said that an instrument similar to SSM is already available to mostly the developed countries for over 2 decades.
  2. The draft text says that work on a SSM shall be pursued taking account of proposals by the WTO Member countries.
  3. It shall be in the broader context of agricultural market access.
  4. The text also says that the WTO’s General Council shall regularly review progress on SSM negotiations.
  5. The text mentions that the negotiations on the issue of public stockholding for food security purposes shall continue to be pursued as a priority.
WTO and India

India opposes rich nations’ attempts to cherry-pick farm issues

Against bid to link deal on farm export subsidies to Special Safeguard Mechanism.

  1. India has called for a balanced outcome in negotiations on agriculture including an agreement on Special Safeguard Mechanism (SSM).
  2. A simplified proposal on SSM had been submitted and asked WTO Chair on Agriculture negotiations to speedily work on this.
  3. India has already rejected claims by rich countries that there is a broad consensus for a deal during the WTO’s meet on getting rid of farm export subsidies.
  4. India had sought additional flexibility for developing countries so that they can provide such more subsidies on some products, while reducing subsidies on other products.
WTO and India

No bargain on protection of poor farmers’ interests: India

India has made it clear that protection of poor farmers’ interests and its food security programmes are not up for any bargain at the negotiations.

  1. India will not compromise on the need for a permanent solution, for the issue of public stockholding for food security purposes.
  2. India wants the WTO members to take up on a priority basis the issue of a Special Safeguard Mechanism (SSM).
  3. Brazil, being a leading agricultural exporter, wanted more market access for its farm items in return for supporting the SSM proposal, a demand that did not go down well with India.
  4. The developed countries, citing the slow progress in Doha Round negotiations.
  5. They want the Round to be brought to close or expand the ambit of the negotiations by including ‘new’ issues of their interest.
WTO and India

India rejects rich world’s attempt to create divisions

  1. India will oppose the developed world’s attempts to ask developing countries with relatively higher growth to commit to greater and faster market access.
  2. The world’s rich countries wants ‘differentiated’ treatment of developing countries.
  3. The countries with higher growth such as India and China can be categorised differently from the other developing countries.
  4. India’s WTO agenda also includes that the developed countries substantially reduce their trade distorting subsidies.
WTO and India

India rejects ‘artificial deadlines’ for WTO deal

Opposes rich nations’ attempts to introduce ‘new’ issues.

  1. India has said it will neither agree to ‘artificial deadlines’ to conclude the WTO’s Doha Round negotiations.
  2. Aimed at liberalising global trade, nor concur with rich nations’ attempts to expand the ambit of the talks by introducing “new” issues without completely fulfilling the Round’s ‘development’ dimension.
  3. The Doha Round talks had begun in 2001 and has since missed several deadlines for concluding it.
  4. Due to persisting differences between the developed and developing world on a host of issues related to trade liberalisation and granting market opening commitments.

The ‘new’ issues pertain to labour practices, environmental standards, global value chains, e-commerce, competition and investment provisions, transparency in government procurement.

WTO and India

India may ratify WTO trade facilitation pact

India is likely to ratify the WTO’s Trade Facilitation Agreement(TFA), aimed at easing customs rules to expedite trade flows.

  1. But, India might not not use all available flexibilities in the TFA to determine the timing of implementation of various commitments.
  2. It is part of the govt’s initiatives to attract more investment by improving India’s ranking in the World Bank’s “ease of doing business” report,
  3. The items which are still unresolved include finding a permanent solution to the issue of public stockholding for food security purposes as well as measures to protect poor farmers from sudden import surges of farm products.
WTO and India

At WTO talks, India to oppose bid at dilution

At Nairobi meet, New Delhi will resist efforts to create divisions among developing nations.

  1. India is likely to oppose efforts by rich countries to dilute ‘development’ dimension of the Doha Round negotiations, which are aimed at reaching an agreement to liberalise global trade.
  2. Some developed countries attempted to categorise nations such as India (now ‘developing’) as ‘emerging economies’.
  3. By making “unsubstantiated” allegations that such ‘emerging economies’ were cornering the benefits meant for developing countries.
  4. Members can apply the principle of ‘self-election’ and themselves decide if they are to be labelled as ‘developing’ countries.
  5. Significantly, there are attempts by the rich countries to “redefine developmental aspects” of the Doha Development Agenda negotiations.
WTO and India

WTO lowers world trade growth estimate

World Trade Organisation (WTO) revising its projections for growth in world trade downwards.


  1. Earlier, WTO had predicted a subdued recovery in world trade growth was estimated to improve from 2.8 per cent in 2014 to 3.3 per cent in 2015.
  2. Commerce Ministry had an ambitious target of double India’s exports in goods and services from $465 billion to $900 billion over five years.
  3. There certainly can be a case for short-term ameliorative measures.
  4. Some of the major export sectors are employment-intensive and if they suffer, this will have a bit of a domino effect.
  5. Trade policy says, need to move away from subsidies and addressing challenges relating to procedural hurdles, transaction costs and infrastructure deficits.
WTO and India

India wants answers on EU Ban of GVK Drugs

  1. Nirmala Sitaraman said it was improper for EU to take a unilateral step in banning the drugs from India.
  2. Our trader talks on EU-India FTA are in limbo because of this impasse.
  3. But EU has maintained that the issue stems from Hyderabad-based GVK providing them inaccurate data.
  4. India might also roll out the National Intellectual Property Rights (IPR) law. Cabinet talks going on.
WTO and India

WTO strikes ‘landmark’ IT trade deal


  1. The deal will update the 18-year-old IT Agreement and add 200 products to the zero tariff list.
  2. The deal will cut tariffs on $1.3 trillion worth of technology products besides creating jobs and adding to the global GDP.
  3. The benefitting products range from advanced computer chips to GPS devices, medical equipment, printer cartridges and video-game consoles
  4. This deal alongwith the Trade Facilitation Agreement from Doha Round will boost the global liberalized trade system.
WTO and India

US may force India to slash farm subsidies

US has declared special and differential treatment (S&DT) a “threshold” issue, implying that all developing countries will not be treated on a par with regard to farm and fisheries subsidy programmes.

What this means is that Washington wants China and India to be treated separate from other developing countries—regardless of their hundreds of millions of poor farmers and fishermen—with regard to commitments on farm and fisheries subsidies in the Doha Development Agenda (DDA) trade negotiations.

WTO and India

[op-ed snap] India’s upcoming WTO challengesop-ed snap

  1. India and the US are on the cusp of cementing relations on several fronts but not on the ground of trade agreements @ WTO.
  2. Washington has pointed a finger at the continued barriers, largely in 2 sectors – agriculture and intellectual property protection – in India.
  3. US raised 3 sets of concerns about Indian agriculture policies – India’s “unpredictable” tariff policies, India’s unscientific and unjustifiable import barriers on agricultural products & India’s farm subsidies.
  4. US has been on the path of projecting China and India as the untold-subsidy-villains.
  5. Will the Modi government stand up for its poor farmers? That is the test it would face at Nairobi.
WTO and India

India loses poultry case against United States at WTO

  1. WTO’s Dispute Settlement Board (DSB) ruled that India’s ban on import of poultry meat, eggs and live pigs from US is inconsistent with the international norms.
  2. These poultry products were banned as a precautionary measure to prevent outbreaks of Avian Influenza and bird flu fears.
  3. With this WTO ruling, US which is one of the world’s largest exporters of chicken meat will be able to export their poultry products to Indian market without any trade barriers.
WTO and India

India challenges WTO’s reversal on Poultry ban from US

  1. Back in 2007, India had invoked the SPS (Sanitary and Phytosanitary Measures) agreement clause of WTO and banned US poultry import.
  2. SPS is a treaty under WTO relating to food safety, animal and plant health (phytosanitation) wrt imported pests and diseases.
  3. US challenged that and won against India. India will now move to the DSB (Dispute Settlement Board) of the WTO.

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