World Trade Organization and India – An Overview

This paper attempts to study how when GATT's successor, the World Trade Organisation (WTO),was formed in 1995, India became a founding member and it’s relation with WTO. World TradeOrganization, as an institution was established in 1995. It replaced General Agreement on Trade and Tariffs(GATT) which was in place since 1946. In pursuance of World War II, western countries came out withtheir version of development, which is moored in promotion of free trade and homogenization of worldeconomy on western lines. This version claims that development will take place only if there is seamlesstrade among all the countries and there are minimal tariff and non- tariff barriers. That time along with twoBretton wood institutions – IMF and World Bank, an International Trade Organization (ITO) wasconceived. ITO was successfully negotiated and agreed upon by almost all countries. It was supposed towork as a specialized arm of United Nation, towards promotion of free trade. However, United States alongwith many other major countries failed to get this treaty ratified in their respective legislatures and henceit became a dead letter. It is expected that by 2008 India will consume electronic items worth $ 400 billion.As per current situation, out of this it is likely to import atleast goods worth $300 billion. Electronichardware manufacturing is one of the main components of ‘Make in India’ and ‘Digital India’ program.Hence India stayed away from ITA-II. From India’s point of view, services present a different picture fromagriculture and industrial tariffs. As an emerging global power in IT and business services, the country is,in fact, a demander in the WTO talkson services as it seeks more liberal commitments on the part of itstrading partners for cross- border supply of services, including the movement of ‘natural persons’ (humanbeings) to developed countries, or what is termed as Mode 4 for the supply of services. With respect toMode 2, which requires consumption of services abroad, India has an offensive interest.Consequently, GATT became de-facto platform for issues related to international trade. It has to itscredit some major successes in reduction of tariffs (custom duty) among the member countries. Measuresagainst dumping of goods like imposition of Anti-Dumping Duty in victim countries.