Tuesday, February 3, 2009


World Trade Organisation: India is one of the (out of 104) founder members of the WTO. The GATT was not an organization but it was only a legal agreement. On the other hand WTO is designed to play the role of watchdog in the spheres of trade in goods, trade in services, foreign investment, intellectual property rights etc.

There was much heated discussion and arguments for and against regarding India becoming a
member of the WTO.
India was one of the 76 Governments that became members of the WTO on the first day of the
formation of WTO. Thus, India was one of the founder members of the WTO .


The GATT secretariat estimated that largest increase in the level of merchandise trade in goods (in general, it would be US $ 745 billion .by the end of 2005) will be in the areas of clothing (60 per cent), agriculture, forestry and fishery products (20 per cent) and processed food and beverages (19 per cent). India's competitive advantage lies in these fields. Hence, it is logical to believe that India will obtain large gains in these sectors.
India's textile and clothing exports will increase due to the phasing out of Multi-fibre An'angement (MFA) by 2005 .

· The reduction in agricultural subsidies and barriers to export of agricultural products, agricultural exports from India will increase .
· The multilateral rules and disciplines relating to anti-dumping, subsidies and countervailing measures, safeguards and disputes settlement machinery will ensure greater security and predictability of international trade. This would be favourable environment for India's international business .
· India along with other developing countries has the market access to a number of advanced countries due to the imposition of the clauses concerning to trade without discrimination.


Despite the benefits of WTO to India, many economists and sociologists argue that, India would be
in a disadvantageous position by becoming a member of WTO. Their argument include:
· Trade Related Intellectual Property Rights (TRIPs) : Protection of intellectual property rights (patents, copyrights, trademarks etc.) has been made stringent. It is argued that the TRIPs agreement goes against the Indian Patents Act, 1970. Only process patents can be granted in food, chemicals and medicines under the Indian Patents Act. TRIPs agreement provides for granting product patents also. Under TRIPs patents can be granted to methods of agriculture and horticulture, bio-technological process including living organism like plants and animals. The duration of patents under TRIPs is 20 years .
· Introduction of product patents in India will lead to hike in drug prices by the MNCs who have the product patent. This will hit the poor people who will not have the generic option open .
· The extension of intellectual property right to agriculture has negative effects on India. Presently, plant breeding and seed production are largely, in the public domain. Indian scientists have undertaken plant breeding and multiplication is in the hands of National and State Seed Corporations. Government, through this machinery, provides seed to Indian farmers at very low prices. Indian scientists, in future will find it extremely difficult to breed new varieties and Indian research institutions will be unable to compete financially with MNCs and will be denied access to patented genetic material. MNCs will get the control over our genetic resources and as such the control over food production would be jeopardised .
· Patenting has also been extended to a large area of micro-organisms .
· Application of TRIMs agreement undermines any plan or strategy of self-reliant growth based on local technology and resources .
· Services : Service sector like insurance, banking, telecommunications, transportation is backward in India compared to that of developed countries. Therefore, inclusion of trade in services is detrimental to the interest of India. Liberalisation of service sector would be under tremendous pressure.

1 comment:

  1. In My Opinion; Becoming Member of World Trade Organization would be definitely beneficial for India in order to explore more horizons of international Trade!

    Service Agreements