TRADE POLICY REVIEW:

Concluding remarks by the Chairperson

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  • Trade Policy Review: India

  

The seventh Trade Policy Review of India has given us a good opportunity to gain a better understanding about the trade, economic, and investment policies adopted by India since its previous Review in 2015, and the challenges that it continues to face. The statement from the head of India's delegation, Mr Anup Wadhawan, Commerce Secretary, greatly facilitated our discussion. As did the thoughtful remarks from our discussant, Ambassador Sunanta Kangvalkulkij of Thailand. I would like to thank India for its active engagement in this review process, despite all the constraints posed by the COVID-19 pandemic. The large number of interventions made at this meeting (52 delegations) is an illustration of the high importance attached by Members to India's trade and investment policies and practices.

Members commended India on its strong economic growth during the review period, particularly in the services sector, allowing India to become one of the world's largest economies. Members believed that the continuous economic reforms focussed on increasing efficiency and inclusiveness contributed to these positive developments and led to an improvement in socio-economic indicators, such as per-capita income and life expectancy. Members expected that this positive economic performance would help to further integrate India into the global economy and make a larger contribution to world trade.

Members noted that India had adopted a comprehensive stabilization and stimulus package to deal with the impact of the pandemic. They encouraged India to ensure that these measures are designed and implemented in a transparent manner and meet legitimate policy goals without unduly restricting trade. In this regard, as at the time of the last Review, Members reminded India of the importance of providing sufficient information to guarantee transparency on the implementation of its regulations in order to avoid an unnecessary burden on economic operators. Members also urged India to submit notifications on a regular basis to the WTO, especially those related to export subsidies for agricultural products.

Members noted that India, as a founding Member of the WTO and a major trading nation, had benefitted from the rules-based multilateral trading system. In this context, India was urged to play a constructive role in ongoing negotiations and reform efforts. Members invited India to participate in the new Informal Working Group on Trade and Women’s Economic Empowerment. Likewise, Members encouraged India to join initiatives such as the Informal Working Group on Micro, Small and Medium-sized Enterprises as well as the three Joint Statement Initiatives on e-commerce, services domestic regulation, and investment facilitation. Regarding regional trade agreements, Members noted that during the review period India did not conclude any broad-based trade agreement and that it had withdrawn from the RCEP. Some Members urged India to finalize ongoing RTA negotiations and encouraged India to consider simplifying its rules of origin requirements. Members thanked India for providing duty free and quota free access for LDC exports.

Members commended India's measures to improve its business and investment environment, which included raising foreign equity limits in some sectors, opening up others, and facilitating investment procedures. Members took note of the programmes put in place to promote foreign direct investment and local manufacturing, and to further integrate into global supply chains such as Make in India, Digital India, Start-up India, Skill India and Self-Reliant India. They welcomed these initiatives, while raising concerns about the possible trade restrictions they could introduce, urging India to be mindful of any trade implications.

Members welcomed India's adoption of trade facilitation measures resulting from the implementation of the Trade Facilitation Agreement (TFA). Nevertheless, Members noted that India’s trade policy had remained largely unchanged since the previous Review, with continued heavy reliance on instruments such as the tariff, export taxes, minimum import prices, import and export restrictions, and licensing. On the tariff, concerns were expressed with respect to its complexity and uncertainty, the increase in tariff rates, tariff preferences, and tariff concessions. Members welcomed the implementation of the Goods and Services Tax which replaced several indirect taxes and would result in increased transparency in India's taxation system. Highlighting that India was an active user of trade remedies, Members asked India to take a more cautious approach in applying anti-dumping and safeguard measures and emphasized that all relevant investigations should be conducted in conformity with WTO provisions. Some Members raised concerns about India's use of technical regulations and SPS measures, including compliance with international standards.

On other issues, some Members welcomed the modernization of the government procurement regime, but concerns were expressed regarding preferences granted to local suppliers. Members also noted the role of the state in several sectors, including the existence of state trading enterprises. Some Members welcomed the adoption of the National IPR Policy and India's efforts to improve its IPR regime; however, challenges to better protect and enforce IPRs were also noted.

Concerns were expressed about the high level of government intervention in the agriculture sector. Members recognized the importance of the sector in supporting livelihoods and food security; however, they urged India to reform its agricultural policies that continued to be based on significant levels of domestic and export support for key crops, including through subsidies for certain crops such as sugar, and to inputs. Members recognized India's efforts to liberalize this sector, but believed that further liberalization would benefit India's consumers and producers. They also encouraged India to actively participate in the agricultural negotiations as well as in the fisheries negotiations.

Members noted that India's economic growth has been driven by the services sector, and welcomed India's further openness in several sectors. Relaxation of cabotage and developments in digitalization were also mentioned. Given the importance of the services sector, Members considered that India's active involvement in the ongoing WTO discussions, such as on services domestic regulations and e-commerce, would contribute to further India's economic development.

These points briefly cover the main topics addressed during this Review. Let me once again thank India, the discussant, and the rest of the Members for their valuable very positive and active contribution to our two days of discussions, which provided us with a better understanding of India's trade and related policies and practices and helped us identify the achievements accomplished since the last Review in 2015, and the challenges that remain ahead. Members hoped that the Indian economy would soon return to its growth path following a stronger and more diversified integration into the world economy.

India received more than 1,000 advance written questions from 32 Members, and it has already responded to most of them. In a month's time, Members should receive replies to questions that are still outstanding, which will then mark the successful conclusion of India's seventh Review.

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