TRADE POLICY REVIEW:

Concluding remarks by the Chairperson

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Trade Policy Review: India
  

  1. This fifth Trade Policy Review of India has provided an opportunity for us to improve our understanding of recent developments in India's trade and trade‑related policies, and to identify areas in which there is room for improvement.  I would like to thank Commerce Secretary Rahul Khullar and his delegation for their constructive engagement in this meeting.  My thanks also goes to Ambassador Aran for his excellent participation as discussant, and to the Members for their numerous interventions.  I would further like to commend the authorities of India for the effort that they have made to answer the almost one thousand questions that they received prior to this meeting, which have been extremely useful to us.
     
  2. Members congratulated India for the solid economic performance achieved during the period under review, which had allowed GDP to grow at an impressive rate.  India was continuing to reap the benefits of the trade liberalization process and of the structural reforms begun in the 1990s.  It deserved praise for dealing satisfactorily with the economic crisis, without adopting any protectionist trade measures.  Members urged India to continue to deepen the liberalization process that had been so beneficial to the country.
     
  3. Members also praised India for having used trade policy to promote sustainable growth, and for having acted to ensure that the different levels of society would benefit from it.  However, in spite of all that had been achieved, poverty reduction remained a challenge.
     
  4. Members expressed their satisfaction with the adoption of trade facilitation measures such as the introduction of an electronic customs clearance system, and with the fact that the average MFN tariff had decreased during the period under review.
     
  5. Similarly, there was a positive assessment of the legal and institutional reforms introduced by India to support trade and investment;  however, Members highlighted a number of areas for further improvement, as mentioned further on.
     
  6. Members acknowledged India's active participation in the WTO, particularly in the DDA negotiations, and the fact that India was a strong proponent of the multilateral system.  They noted with satisfaction India's participation as an observer in the Agreement on Government Procurement, and urged India to accede to that Agreement.  They also urged India to improve its compliance with its WTO notification obligations.
     
  7. A close examination of the observations made by delegations during this Review would suggest that there were reasons to recommend that the authorities of India consider introducing further improvements in certain areas.  There are ten in all.  Some of which have been already mentioned by Mr. Khullar this morning.
     
    1. Tariffs and other import duties:  While they recognized that there had been a reduction in the average MFN tariff, Members encouraged India to make its tariff regime simpler and more transparent, and to narrow the gap between the bound and applied rates.  They also urged India to simplify its tax system, for example by eliminating certain additional levies and by introducing a tax on goods and services at the national level.
       
    2. Non‑tariff measures:  Some Members noted that imports could be subject to prohibitions, restrictions and licensing.  They considered India's licensing system to be complex and lacking in transparency, and they urged India to simplify it.  In general, Members suggested that India adopt a less complex import regime.
       
    3. Anti‑dumping:  Members noted that India was one of the WTO's most active users of anti‑dumping measures, and that it had also imposed a number of safeguard measures.  This morning Mr. Khullar mentioned that only one safeguard measure was in place.  They called upon the authorities of India to use contingency measures more rationally in order to avoid harming trade.
       
    4. SPS and TBT:  A number of Members questioned the scientific basis for certain sanitary and phytosanitary measures adopted by India, and pointed out that certain technical standards could constitute a barrier to trade.  Members urged India to eliminate measures that impeded trade and to introduce a notification mechanism so that trading partners could be kept informed of the measures in force.
       
    5. Government procurement:  While recognizing the progress made by India on certain aspects of its government procurement regime, Members pointed out that it was still possible to enhance the openness and transparency of the system.  With reference to the decentralization of government procurement, certain Members expressed concern that the system would not be governed by a common law.  India was urged to reconsider the costs to its economy of using preferences and set‑asides, and to join the WTO Plurilateral Agreement on Government Procurement as soon as possible.
       
    6. Incentives:  Members pointed out that India had a series of incentive schemes to attract investment, promote exports and protect agriculture and other less advantaged sectors, such as micro‑ and small enterprises.  Some Members asked whether India had assessed the impact of these programmes and determined whether they were WTO‑consistent, while others urged India to notify the programmes to the WTO.
       
    7. Intellectual property:  Noting the actions undertaken to strengthen the enforcement of intellectual property rights, including through administrative and legal reforms, Members urged India to continue stepping up efforts in this area, which remained a source of particular concern.
       
    8. Agriculture:  While recognizing the importance of agriculture for India, Members also noted the support and protection received by that sector.  Mention was made of the fact that tariff protection for agricultural products was substantially higher than for industrialized goods and that very high tariffs were maintained for certain products.  Members encouraged India to liberalize the agricultural sector by reducing tariffs, and by eliminating superfluous sanitary and phytosanitary measures and export restrictions on raw materials, as it had done for cotton last year.
       
    9. Services:  Members urged India to open up the services market and bind any liberalization under the GATS, noting that the country stood to benefit from the further liberalization of financial and transport services.
       
    10. Investment:  Members observed that most sectors were at least partly open to foreign direct investment.  Members urged India to eliminate remaining investment barriers, such as permits and requirements, which reduced transparency and could end up being more restrictive than an investment cap.  A number of Members emphasized the importance of foreign direct investment for India's future development in view of its infrastructure requirements.
       
  8. This successfully concludes our fifth Review of India.  The detailed nature of the questions submitted and the numerous interventions attest to Members' interest in India's trade policies and practices.  I would once again like to thank the delegation of India, the discussant and the Members for contributing to an enlightening Review of India's trade policies and practices.

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