I do not remember when I gave this Radio Talk on WTO at Puducherry. Accidently I stumbled upon this write up and felt that it shall be posted in blog. I am trying my level best to capture my reflections on the recent Srilanka Tour. In a few days I must post lest all those reflective mood might evaporate into thin air. Now the Radio Talk
I am here to discuss about some implications of WTO on India’s Economy. This talk has an immediate relevance and contextual significance for two reasons. First, after lifting of the final phase of quantitative restrictions (shortly called QRs) on imports, the vulnerability of Indian economy to the growing forces of globalization has increased in a more heightened degree. The continuing hue and cry for a level playing field is an indicative of trend towards a calibrated globalization as against the path of indiscriminate globalization and conferring of unfettered freedom to Multinational Corporations suggested by WTO’s rules and provisions to all the member nations, regardless of their stages of development and population pressures.
Secondly, the U.S. and the European Union are too keen to launch an ambitious new round of multi lateral trade negotiations at the WTO ministerial meeting in Doha scheduled to take place in November. They seek a fresh round that will lead to both, further liberalization of world trade and to clarifying, strengthening and extending WTO rules so as to promote economic growth. Having understood the intensity of anti-globalization protests at Seattle meeting in 1999, the leaders of these world’s two largest trading partners more like two elephant of world trade, are working continuously to go ahead with further liberalization of trade in order to support and stimulate growth.
Against the backdrop of these action packed events and sentiments surrounding World Trade Organization in a more stagnant phase of global economy at present, I am here to examine and analyze the implication of WTO regime on Indian economy.
Unlike, Communist China, which commenced economic reform as early as 1978, with well thought out strategy, the reform process that began in our country with the inevitable two stage devaluation of rupee was more of an historical accident and certainly not be choice.
It is an irony of fate that Indian Economy had very little time to adjust and adapt itself to the forces of globalization and reform process, as internal liberalization had been not yet effectively administered then. As if to add insult to the economic injury, while India was in the mid way of reform process, it was engulfed by Uruguay Round of GATT Negotiation which ultimately culminated in the establishment of World Trade Organization, acquiring on all encompassing role of world policeman to regulate and monitor traffic in the arena of world trade and investment, including international finance.
The essence of WTO agreements, ultimately boils down to rapid global integration, which in turn means development of borderless production to cater to the needs of both the domestic and export markets. The consumers all over the world can have access to quality products at affordable prices. The opening up of the market does not pose any serious problem to those producers who are cost effective, quality conscious and thus internationally competitive.
For instance, following the removal of quantitative restrictions and gradual reduction in tariff, the dumping of Chinese goods on India has emerged as a serious threat. India has responded by taking anti-deeming measures and also hiking tariffs to protect its domestic industry. Thus, for the time being, the prospect of Chinese bicycles swamping the Indian market is far-fetched thanks to 40% duty and freight expenditure
The prospect of Chinese bicycles swamping the Indian market is farfetched, thanks to 40% duty and freight-however in the fancy bicycles segment, they may prove competitive. It’s not easy to stop a chain of dealerships-well established brands are there already.
Combined with Chinese inability to set up a chain of dealership might give some further relief. But the brutal truth is that china with all the pressures of huge number, has adapted its economy to cater to both domestic and export market, acquiring the comparative advantage in a variety of trade segments, thanks to cheap labour, technology upgradation and judicious involvement of Multi National companies in their exports effort. But kindly remember, china has a tremendous competitive edge over a variety of goods which we cannot prevent from entering into our border by erecting tariff walls perpetually.
To meet the challenges of the opening up the economy and the renewal of quantitative restrictions on imports, it is not merely sufficient to negotiate them through the route of tariffs, although there is provision for it. In the coming years, India will be confronted with heightened competition in not only pushing exports but also growing threat of cheaper imports from countries such as China.
In the changed economic circumstances, if India wants to complete with more efficient producers like China, it will have to strengthen its manufacturing facilities but also relocate them, if necessary.
I am here to discuss about some implications of WTO on India’s Economy. This talk has an immediate relevance and contextual significance for two reasons. First, after lifting of the final phase of quantitative restrictions (shortly called QRs) on imports, the vulnerability of Indian economy to the growing forces of globalization has increased in a more heightened degree. The continuing hue and cry for a level playing field is an indicative of trend towards a calibrated globalization as against the path of indiscriminate globalization and conferring of unfettered freedom to Multinational Corporations suggested by WTO’s rules and provisions to all the member nations, regardless of their stages of development and population pressures.
Secondly, the U.S. and the European Union are too keen to launch an ambitious new round of multi lateral trade negotiations at the WTO ministerial meeting in Doha scheduled to take place in November. They seek a fresh round that will lead to both, further liberalization of world trade and to clarifying, strengthening and extending WTO rules so as to promote economic growth. Having understood the intensity of anti-globalization protests at Seattle meeting in 1999, the leaders of these world’s two largest trading partners more like two elephant of world trade, are working continuously to go ahead with further liberalization of trade in order to support and stimulate growth.
Against the backdrop of these action packed events and sentiments surrounding World Trade Organization in a more stagnant phase of global economy at present, I am here to examine and analyze the implication of WTO regime on Indian economy.
Unlike, Communist China, which commenced economic reform as early as 1978, with well thought out strategy, the reform process that began in our country with the inevitable two stage devaluation of rupee was more of an historical accident and certainly not be choice.
It is an irony of fate that Indian Economy had very little time to adjust and adapt itself to the forces of globalization and reform process, as internal liberalization had been not yet effectively administered then. As if to add insult to the economic injury, while India was in the mid way of reform process, it was engulfed by Uruguay Round of GATT Negotiation which ultimately culminated in the establishment of World Trade Organization, acquiring on all encompassing role of world policeman to regulate and monitor traffic in the arena of world trade and investment, including international finance.
The essence of WTO agreements, ultimately boils down to rapid global integration, which in turn means development of borderless production to cater to the needs of both the domestic and export markets. The consumers all over the world can have access to quality products at affordable prices. The opening up of the market does not pose any serious problem to those producers who are cost effective, quality conscious and thus internationally competitive.
For instance, following the removal of quantitative restrictions and gradual reduction in tariff, the dumping of Chinese goods on India has emerged as a serious threat. India has responded by taking anti-deeming measures and also hiking tariffs to protect its domestic industry. Thus, for the time being, the prospect of Chinese bicycles swamping the Indian market is far-fetched thanks to 40% duty and freight expenditure
The prospect of Chinese bicycles swamping the Indian market is farfetched, thanks to 40% duty and freight-however in the fancy bicycles segment, they may prove competitive. It’s not easy to stop a chain of dealerships-well established brands are there already.
Combined with Chinese inability to set up a chain of dealership might give some further relief. But the brutal truth is that china with all the pressures of huge number, has adapted its economy to cater to both domestic and export market, acquiring the comparative advantage in a variety of trade segments, thanks to cheap labour, technology upgradation and judicious involvement of Multi National companies in their exports effort. But kindly remember, china has a tremendous competitive edge over a variety of goods which we cannot prevent from entering into our border by erecting tariff walls perpetually.
To meet the challenges of the opening up the economy and the renewal of quantitative restrictions on imports, it is not merely sufficient to negotiate them through the route of tariffs, although there is provision for it. In the coming years, India will be confronted with heightened competition in not only pushing exports but also growing threat of cheaper imports from countries such as China.
In the changed economic circumstances, if India wants to complete with more efficient producers like China, it will have to strengthen its manufacturing facilities but also relocate them, if necessary.
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