Trade Agreements & WTO: India's Role & Impact
1. World Trade Organization (WTO)
Established: 1995 (Replaced GATT)
Headquarters: Geneva, Switzerland
Objective: Ensure smooth global trade through rules and dispute resolution.
Key WTO Principles:
- Most Favored Nation (MFN): Equal trade privileges to all members.
- National Treatment: Foreign goods treated equally as domestic goods.
- Special & Differential Treatment (SDT): Flexibility for developing countries.
2. India's Major Trade Agreements
| Agreement |
Type |
Key Features |
| India-ASEAN FTA (2010) |
Free Trade Agreement |
Covers 80% of traded goods; concerns over trade deficit. |
| RCEP (Rejected by India in 2019) |
Mega FTA (China-led) |
India feared dumping of Chinese goods. |
| India-UAE CEPA (2022) |
Comprehensive Economic Partnership |
Targets $100 bn trade in 5 years; zero duty on 90% items. |
| SAFTA (2006) |
South Asian FTA |
Low intra-regional trade due to political tensions. |
3. WTO's Impact on India
Positive Impacts:
- IT & Pharma boom: TRIPS agreement helped generics (e.g., "Pharmacy of the World").
- Agricultural exports: Basmati rice, spices gained global market access.
Challenges for India:
- Agriculture: Subsidy caps (AMS) under WTO affect MSP.
- Public Stockholding: India fights for permanent solution at WTO.
- Fisheries subsidies: New WTO deal impacts small fishermen.
4. Recent WTO Issues & India's Stand
- Peace Clause: Temporary relief for India's food stockholding beyond WTO limits.
- WTO Disputes: India vs USA on solar panels, export subsidies.
- Plurilateral Agreements: India opposes e-commerce talks (data sovereignty concerns).
5. Key Terms (Prelims Focus)
- TRIPS: Intellectual property rights agreement.
- TRIMS: Rules on investment measures.
- Doha Round: Stalled WTO negotiations (since 2001).
Conclusion
WTO and trade agreements shape India’s global trade policy. Focus on RCEP, India-UAE CEPA, and WTO’s agriculture debates for UPSC Prelims.