India gets a pat on the back for trade policies

India gets a pat on the back for trade policies

With an eye on the rapidly expanding size of the Indian market, industrialized and leading developing countries want New Delhi to do more by liberalizing trade and investment policies as well as reducing anti-dumping and other trade-restrictive measures.
Several members of the World Trade Organization (WTO) on Tuesday praised India for pursuing open and liberal trade and macroeconomic policies while increasing its global presence as a roaring economy. With an eye on the rapidly expanding size of the Indian market, industrialized and leading developing countries want New Delhi to do more by liberalizing trade and investment policies as well as reducing anti-dumping and other trade-restrictive measures.
At India’s sixth trade policy review (TPR) meeting at WTO, trade envoys from both industrialized and developing countries welcomed government’s pro-industry and pro-trade policies, including the impressive economic growth performance over the past four years.
The trade policy review lets the members review the overall trade and economic policies of a country under the scanner. It comes every four years for developing countries and every two years for industrialized countries.
During the two-day review, members listed their immediate day-to-day trade concerns in the country under scrutiny. Ahead of the meeting, the WTO Secretariat issued a comprehensive report, running into about 174 pages, chronicling all major initiatives India had taken over the last four years. The report also listed trade-restricting export and import measures adopted in the past four years.
India’s commerce secretary Rajeev Kher delivered an upbeat report on the policies implemented during 2011-15 against the backdrop of a fluctuating international trade and economic environment. Kher said “new beginnings” over the past 12 months charted out “a brand new agenda for reform, growth and investment”, based on a model of “better governance with less government”. The commerce secretary said the government has placed considerable emphasis on developing strong infrastructure, creating a road map for reforms, promoting ease of doing business, ramping up investment, rationalizaing subsidies, and creating a competitive, predictable and clean tax policy framework.
“Fifteen years ago, India occupied a very small space on the global trade canvas,” Kher told the trade envoys. “Today, foreign trade is a significant part of the Indian economy.” “As various new initiatives of the government start showing results, India will become more competitive in several product areas which would, in turn, open up better trade prospects,” he maintained.
India’s two-way merchandise trade crossed $760 billion during 2013-14 and it now accounts for 44.1% of gross domestic product. If services trade is added to the trade in goods, then India’s total trade is estimated at around $1 trillion.
Services account for more than 50% of gross value added in the country, while the share of agriculture has witnessed a gradual decline and now accounts for 19%. The share of industry is around 44%.
Kher also listed new policy initiatives such as Make in India, Digital India and Skill India, which enable India to respond adequately to new external challenges and simultaneously keep in step with a rapidly evolving international trade architecture. The discussant for the India TPR meeting, Esteban B. Conejos, agreed with Kher saying that India has made tremendous strides in different areas, including in trade facilitation, self-assessment, risk management and investment rules. Conejos, however, listed five areas where the WTO members want to see more progress in India’s trade and economic policies.
They include managing agriculture subsidies, reducing the recourse to sanitary and phyto-sanitary measures and technical barriers to trade, rationalizing the complex structure for import and domestic tariffs, enhancing the transparency in the regulatory bodies, and lowering the use of anti-dumping measures. “Overall, members welcomed India’s trade and economic policies,” Conejos told Mint. The European Union (EU) has expressed confidence that the Indian economy is on a sustained growth path.
European Union ambassador Angelos Pangratis said that Brussels looks forward to “more business and investor-friendly” policies so as to ensure India’s foreign trade regime remains “more open and transparent”. India should also embark on creating “investor-friendly FDI policy” as well as a predictable and clean tax policy environment, the EU said.
Pangratis said the Secretariat report drew attention to import procedures/import bans, local content requirements, trade-related investment measures, and the impact of subsidies
Brazil’s trade envoy Marcos Galvao said, “Brazil and India have played an important role in global trade and economic relations. Trade between the two countries has increased rapidly. But we want to diversify our trade with India by enlarging the scope for more products in different areas.”
China welcomed India’s rise as beneficial for the global economy. The Chinese official did not express any concerns with the Indian trade measures or policies.
The US, however, cautiously welcomed India’s trade and economic policies but made several demands. It called for a stronger intellectual property regime as well as lower agriculture tariffs. Washington also called for further opening up of the services sector and slashing of market-support-price incentives.
Envoys from over 30 countries who spoke at the meeting asked India to clarify its policy measures in economic environment, the trade policy regime, trade policies and practices, and sectoral policies. India will answer over 500 questions raised in these areas by Thursday when the meeting comes to a close.
Source: Livemint
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