Wto and Its Impact on Indian Economy

11045 Words Aug 25th, 2013 45 Pages
India is a founder member of the General Agreement on Tariffs and Trade (GATT) 1947 and its successor, the World Trade Organization (WTO), which came into effect on 1.1.95 after the conclusion of the Uruguay Round (UR) of Multilateral Trade Negotiations. India’s participation in an increasingly rule based system in the governance of international trade is to ensure more stability and predictability, which ultimately would lead to more trade and prosperity for itself and the 134 other nations which now comprise the WTO. India also automatically avails of MFN and national treatment for its exports to all WTO Members.
The WTO agreements cover goods, services and intellectual property. The
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Tariff barriers

The major liberalizations in respect of trade in manufactures are:

1. Expansion of tariff bindings. 2. Reduction in the tariff rates 3. Expansion of duty free access The UR agreement envisages substantial tariff reductions in both industrial and developing countries. The main liberalization by industrial countries include the expansion of tariff bindings (i.e., commitment not to exceed a particular level of tariff) to cover 99 per cent of imports, the expansion of duty free access from 20-43 per cent of imports, and the reduction of trade weighted average tariff by 40 per cent, from 6.2 to 3.7 per cent. However, the gains to developing countries from the tariff cuts by industrial countries are less impressive. The reduction in the average tariffs on their exports to industrial markets is 30 per cent and the labour intensive manufacturers (textiles, clothing, leather goods) and certain processed primary products (fish products), which are regarded as sensitive have below average tariff cuts.

Table 2. Tariff bindings (Percentage of bound tariffs)
| |Before UR agreement |After UR agreement |
|Developed countries |78 |99 |
|Developing countries

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