PRESS RELEASE
PRESS/TPRB/196
24 June 2002
(02-3472)
TRADE POLICY REVIEW: INDIA
Economic reforms led to strong economic performance
The Trade Policy Review Body of the World Trade Organization (WTO) concluded its third review of
India on 19 and 21 of June 2002. The text of the Chairperson’s concluding remarks is attached asa summary of the salient points wh ich emerged during the discussion.
The review enables the TPRB to conduct a collective examination of the full range of trade policies
and practices of each WTO member countries at re gular periodic intervals to monitor significant
trends and developments which may have an  impact on the global trading system.
The review is based on two reports which are pr epared respectively by the WTO Secretariat and
the government under review and which cover all aspects of the country’s trade policies, including
its domestic laws and regulations, the institutional framework, bilateral, regional and otherpreferential agreements, the wider economic needs and the external environment. A record of the
discussion and the Chairperson’s summing-up together with these two reports will be published in
due course at the complete trade policy review of India and will be available from the WTOSecretariat, Centre William Rappard , 154 rue de Lausanne, 1211 Geneva 21.
Since December 1989, the following reports have been completed:  Argentina (1992
and 1999), Australia (1989, 1994 and 1998), Austria (1992), Bahrain (2000) Bangladesh (1992
and 2000), Benin (1997), Bolivia (1993 and 1999), Botswana (1998), Brazil (1992, 1996 and2000), Brunei Darussalam (2001), Burkina Faso (1998), Cameroon (1995 and 2001), Canada
(1990, 1992, 1994, 1996, 1998 and 2000), Chile (1991 and 1997), Colombia (1990 and 1996),
Costa Rica (1995 and 2001), Côte d’Ivoire (1995), Cyprus (1997), the Czech Republic (1996 and2001), the Dominican Republic (1996), Egypt (1992 and 1999), El Salvador (1996), the European
Communities (1991, 1993, 1995, 1997 and 2000), Fiji (1997), Finland (1992), Gabon (2001),
Ghana (1992 and 2001), Guatemala (2002), Guinea (1999), Hong Kong (1990, 1994 and 1998),Hungary (1991 and 1998), Iceland (1994 and 2000), India (1993, 1998 and 2002), Indonesia
(1991, 1994 and 1998), Israel (1994 and 1999), Jamaica (1998), Japan (1990, 1992, 1995,1998
and 2000), Kenya (1993 and 2000), Korea, Rep. of (1992, 1996 and 2000), Lesotho (1998),Macao (1994 and 2001), Madagascar (2001), Malawi (2002), Malaysia (1993, 1997 and 2001),
Mali (1998), Mauritius (1995 and 2001), Mexico (1993, 1997 and 2002), Morocco (1989 and
1996), Mozambique (2001), New Zealand (1990 and 1996), Namibia (1998), Nicaragua (1999),Nigeria (1991 and 1998), Norway (1991, 1996 and 2000), OECS (2001), Pakistan (1995 and
2002), Papua New Guinea (1999), Paraguay (1997), Peru (1994 and 2000), the Philippines (1993
and 1999), Poland (1993 and 2000), Romania (1992 and 1999), Senegal (1994), Singapore(1992, 1996 and 2000), Slovak Republic (1995 and 2001), Slovenia (2002), the Solomon IslandsPRESS/TPRB/196
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(1998), South Africa (1993 and 1998), Sri Lanka (1995), Swaziland (1998), Sweden (1990 and
1994), Switzerland (1991, 1996 and 2000 (jointly with Liechtenstein)), Tanzania (2000), Thailand(1991, 1995 and 1999), Togo (1999), Trinidad and Tobago (1998), Tunisia (1994), Turkey (1994
and 1998), the United States (1989, 1992, 1994, 1996, 1999 and 2001), Uganda (1995 and
2001), Uruguay (1992 and 1998), Venezuela (1996), Zambia (1996) and Zimbabwe (1994).
TRADE POLICY REVIEW BODY:
REVIEW OF INDIA
Concluding remarks by the Chairperson
This meeting has led to a much better understanding of India’s trade policies. The outcome has
been a very successful third Review of India’s trade policies, practices and measures, due mainly
to the active involvement of the Indian delegation
Members commended India for its strong economic performance over the past decade, with
growth at an average 6% a year and a reduction in poverty. They noted that this resulted, in great
part, from continued economic reforms, including trade liberalization, lower government
involvement in the economy and liberalization of key services sectors. Trade reforms had
concentrated on tariff reform and the removal of quantitative restrictions on imports.
Members noted that India was targeting even hi gher economic growth, particularly to reduce
poverty further. This was to be achieved by stepping up reforms, including trade measures,especially to reduce the anti-export bias in th e import regime. Several Members also remarked on
the importance of investment, particularly for infrastructure, which needed urgent attention. The
FDI regime had been significantly liberalized, but FDI inflows had not increased significantly.Moreover, the high fiscal deficit constrained public investment in infrastructure. The deficit also
had implications for further reform of the tariff,  which remained a major source of tax revenue;
tariff reform needed to be accompanied by significant reform of the internal tax system, whichIndia was striving to do.
India was commended for its initiative to simplify the tariff, but Members voiced concern over the
persistence of high rates, escalation, complexi ty (including exemptions), and the gap between
applied and bound rates. Details were requested on plans to reduce the tariff to two rates (10%
and 20%). The imposition of additional and specia l additional duties to countervail indirect taxes
remained a concern among Members.
Members were worried about India’s increased use of contingency measures, notably anti-
dumping. Some Members also worried that the re moval of QRs had been followed by an increase
in other measures such as strict labelling, certification and SPS requirements. India was
commended for its efforts to enforce protection of intellectual property rights both through theadoption of new legislation and through education campaigns. Members stressed, however, that
further efforts were required in this regard, especially in view of India’s need to attract more FDI.
Members noted the importance of the agricultural sector in India and stressed the need to furtherliberalize it in order to develop its full potential. Concerns were expressed over subsidies for
agricultural products and inputs, which have co ntributed to large grain stocks and to export
restrictions on agricultural goods. Some Members also urged liberalization of the Indian textilesector, noting that protection through high tariffs and small-sector reservations had hindered its
competitiveness.PRESS/TPRB/196
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India has made significant progress in reforming services sectors, notably telecommunications,
banking and insurance. Some Members raised queries in relation to banking reform, includingnational treatment. Questions were also raised about market access in other services such as
telecommunications, audiovisual and software services. Members pointed to the success of India’s
software sector as being indicative of its ability to compete globally.
Members also sought clarification on several specific issues including:
• procedures to review and reduce over-regulation in the economy;
• customs procedures and valuation;
• import restrictions and licensing;
• the role of state trading companies;
• export processing zones;
• performance requirements in the automobile sector;
• government ownership of, and involvement in, financial services;
• policy in transportation services, and land ownership, reforms in the electricity
sector and public postal services.
Members expressed their appreciation for the oral and written responses and explanations
provided by the Indian delegation; they looked forward to receiving answers on still outstanding
questions.
This brings us to the conclusion of our Review of India. The large number of advance questions,
numerous interventions (some 30) and the high level of attendance indicate the important role
that India plays at the WTO. India was commend ed for its reform process, including trade
liberalization, and simplification of the trade and investment regime. However, I think we all agree
that India needs to do more if growth targets ar e to be met and a serious dent is to be made in
the still high rate of poverty. In this regard, Me mbers gave India their full support for its efforts to
reform the economy. Many Members added that these efforts would be greatly enhanced by steps
on the part of India’s trading partners to redu ce, if not remove, their impediments to India’s
exports, especially in the context of new negotiations in line with the Doha Development Agenda(DDA). India has clearly stated its support for the WTO and the DDA but considers that if further
progress is to be made, the onus remains on th e developed countries to keep the promises made
in Doha. This view was endorsed by many other Members, who look to India for leadership inthese negotiations.
ENDS