RESTRICTED  
  
WT/TPR/G/403  
25 November  2020 
(20-8527) Page: 1/22 
Trade Policy Review Body   Original: English  
 
TRADE POLICY REVIEW  
REPORT BY  
INDIA 
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism (Annex 3 of the 
Marrakesh Agreement Establishing the World Trade Organization), the policy statement by India is 
attached.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note: This report is subject to restricted circulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on India. WT/TPR/G/ 403 • India  
 
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  Contents  
1   INTRODUCTION  ................................ ................................ ................................ ..........  4 
2   ECONOMIC ENVIRONMENT  ................................ ................................ ..........................  5 
2.1   Domestic Economy  ................................ ................................ ................................ ...... 5 
2.1.1    Recent growth record  ................................ ................................ ................................  5 
2.1.2    Savings and investment  ................................ ................................ ............................  6 
2.1.3    Inflation  ................................ ................................ ................................ ..................  6 
2.1.4    Employment and labour market scenario  ................................ ................................ ..... 6 
2.2   Trade Performance  ................................ ................................ ................................ ...... 6 
2.2.1    Merchandise Exports, Imports and Trade Balance  ................................ .........................  6 
2.2.2    Direction of merchandise trade  ................................ ................................ ...................  8 
2.2.3    Services trade  ................................ ................................ ................................ ..........  8 
2.3   Invest ment Profile  ................................ ................................ ................................ ....... 9 
2.3.1    Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI)  ..........................  9 
2.3.2    Outward investment by India  ................................ ................................ .................... 10 
2.4   Monetary and Fiscal Policy  ................................ ................................ ........................... 10 
3   REFORMS: ECONOMIC POLICY AND OTHER INITIATIVES  ................................ ..........  10 
3.1   Economic Reforms and Better Delivery of Services  ................................ .......................... 10 
3.1.1    Goods and Services Tax (GST)  ................................ ................................ .................. 10 
3.1.2    Insolvency and Bankruptcy Code  ................................ ................................ ............... 10 
3.1.3    Merger of public sector banks  ................................ ................................ .................... 11 
3.1.4    Government e -marketplace  ................................ ................................ ....................... 11 
3.1.5    Make in India  ................................ ................................ ................................ .......... 11 
3.1.6    Digital India  ................................ ................................ ................................ ............ 11 
3.1.7    Startup India  ................................ ................................ ................................ ........... 12 
3.1.8    Skill Development  ................................ ................................ ................................ ....12 
3.1.9    Direct Benefit Transfer  ................................ ................................ ............................. 12 
3.1.10    Mudra Mission  ................................ ................................ ................................ .......12 
3.2   Labour Policy Reforms  ................................ ................................ ................................ .13 
4   EASE OF DOING BUSINESS AND TRADE FACILITATION  ................................ .............  13 
5   TRADE AND INVESTMENT POLICIES  ................................ ................................ ..........  15 
5.1 FDI Policy  ................................ ................................ ................................ ................. 15 
5.2   Intellectual  Property Rights (IPRs)  ................................ ................................ ................ 16 
6   INDIA AND THE WTO: STRENTHGETHING MULTILATERAL SYSTEM  ...........................  16 
6.1   Appellate Body  ................................ ................................ ................................ ........... 16 
6.2   WTO Reform  ................................ ................................ ................................ .............. 16 
6.3   Special and Differential Treatment  ................................ ................................ ................ 17 
6.4   Fisheries Subsidies  ................................ ................................ ................................ .....17 
6.5   Services  ................................ ................................ ................................ .................... 17 
7   INDIA'S BILATE RAL TRADE ENGAGEMENTS: UNLOCKING MUTUAL BENEFITS  ...........  17 WT/TPR/G/ 403 • India  
 
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  7.1   South Asia Region  ................................ ................................ ................................ ......18 
7.2   South East and East Asia  ................................ ................................ ............................. 18 
7.3   Australia and New Zealand  ................................ ................................ .......................... 18 
7.4   Americas  ................................ ................................ ................................ ................... 18 
7.5   Europe  ................................ ................................ ................................ ...................... 18 
7.6   CIS ................................ ................................ ................................ ........................... 18 
7.7   Middle East and Africa  ................................ ................................ ................................ .19 
7.8   Other Agreements and Negotiations  ................................ ................................ .............. 19 
8   CHALLENGES  ................................ ................................ ................................ .............  19 
8.1   Manufacturing Challenge  ................................ ................................ ............................. 19 
8.2   Infrastructure Development  ................................ ................................ ......................... 19 
8.3   The COVID -19 Challenge  ................................ ................................ ............................. 20 
8.4   Government's Response to COVID -19 ................................ ................................ ........... 21 
9   CONCLUSIONS AND LOOKING AHEAD  ................................ ................................ ....... 22 
 
 
  WT/TPR/G/ 403 • India  
 
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  1  INTRODUCTION  
1.1.  The Seventh Trade Policy Review of India is taking place at a time when the world is witnessing 
an unprecedented health crisis with the contagious COVID -19 hitting economie s across the world in 
rapid succession. Global growth has been severely affected and substantial risks of more severe 
outcomes remain. In its June 2020 update, the International Monetary Fund (IMF) has projected 
that global output would contract by 4.9% in  2020-21.1 
1.2.  After a brief period of moderation, the Indian economy had begun to regain momentum 
towards the end of 2019 with the Index of Industrial Production (IIP)  rebounding from negative 
growth at the end of 2019 to 5.2% in  February 2020, the highest l evel observed since  July 2019. 
The pandemic and the preventive country -wide lockdown in late March 2020 however affected this 
revival, and has linked India's economic recovery to the containment of COVID -19, within its own 
territory as well as globally.  
1.3.  During the period under review, the Government has focused on carrying out structural reforms 
and ensuring inclusive growth. These reforms, along with a host of measures taken by the 
government after the outbreak of COVID -19, should enable the country to bou nce back on its 
targeted growth path.  
1.4.  The fundamentals of the Indian economy are strong and this has ensured macroeconomic 
stability. Inflation is within limits and FDI inflows have increased substantially in the recent years 
with the highest ever FDI infl ow of US D 74.39 billion during the financial year 2019 -20. Improvement 
in the trading environment has enabled the country to better its position in the World Bank’s Doing 
Business ranking from 142 in 2015 to 63 in 2019 .2 India’s position in the Global Inn ovation Index 
has also risen from 81 in 2015 to 52 in 20193, while its ranking in World Bank Logistics Performance 
Index changed from 54 in 2014 to 44 in 20184. These developments clearly suggest an improved 
confidence of the global business and trade in the Indian economy.  
1.5.  The Government envisions that India would be a US D 5 trillion economy by 2024 -25. The ability 
to boost investments and an improved performance in trade would substantially contribute towards 
the success of this endeavour. India ’s low debt leverage, progress made in financial inclusion and 
formalization of the economy can result in credit becoming a key contributor to driving the economic 
growth. Infrastructure development is a cornerstone of the Indian growth strategy, with its strong 
backward and forward linkages that can fuel the economy and improve the competitiveness of the 
country. As a part of infrastructure development, India has launched the National Infrastructure 
Pipeline on 31st December 2019 of ₹ 103 trillion (approx.  USD 1.5 trillion). This initiative focuses on 
housing, access to clean and affordable energy, healthcare, world class educational institutions, 
railways, logistics and warehousing. Strategic disinvestment in public sector undertakings is aimed 
at further increase of private sector participation in the economy, creating efficiencies and generating 
revenue, which will, in turn, enhance the capacity of the Government to invest in developmental 
projects.  
1.6.  On the trade front, during the five -year period under re view, exports grew at a compound 
annual growth rate of 4.5%, while imports grew by 5.7%. India’s share in global exports and imports 
registered a marginal increase from 1.6% & 2.4% in 2015 to 1.7% & 2.5%, respectively, in 2019. 
Total exports, inclusive of services, crossed half a trillion dollar mark for the first time to reach a 
new high of US D 538.1 billion in 2018 -19. This feat was repeated in 2019 -20. 
1.7.  The period under review also saw the multilateral trading system face unprecedented 
challenges. As a fo unding member of the WTO, India remained committed to the centrality of the 
WTO for an integrated global trading system and was an active participant in the efforts to safeguard 
and strengthen the WTO. In order to build a consensus towards this direction, India took the initiative 
to host two informal mini -ministerial meetings in New Delhi, in March 2018 and May 2019. In almost 
all interventions, a need to preserve and enhance the functioning and credibility of the rules -based 
multilateral trading system, w hich is transparent and inclusive, with development as the core 
objective, was highlighted. During this period, India also implemented India – ASEAN Services and 
 
1 https://www.imf.org/en/Publications/WEO/Issues/2020/06/24/WEOUpdateJune2020 . 
2 https://www.doingbusiness.org/en/data/exploreeconomies/india . 
3 Full report is available at: https://www.globalinnovationi ndex.org/Home . 
4 Full report is available at: https://lpi.worldbank.org/ . WT/TPR/G/ 403 • India  
 
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  Investment Agreement and expanded the coverage of Asia Pacific Preferential Trade Agreement 
(APTA).  
2  ECONOMIC ENVIRONMENT  
2.1  Domestic Economy  
2.1.1   Recent growth record  
2.1.  The nominal GDP of the country has increased from US D 2 trillion in 2014 -15 to US D 2.7 trillion 
in 2018 -19. The real GDP is estimated to have grown at the rate of 7% and 6.1% in 2017 -18 and 
2018-19 respectively. Though the growth rate for the year 2019 -20 was initially estimated at 5%, 
on account of COVID -19, this is likely to be at aro und 4.2%. On the demand side of GDP, the 
percentage change in government consumption expenditure and private consumption expenditure 
is estimated at 11.8% and 5.3% respectively in 2019 -20. 
2.2.  The estimates at the disaggregated level (Table 1) indicate that the Agricultural and allied 
sectors grew at 4% in 2019 -20, as compared to the annual growth of 0.6 % in 2015 -16. Compared 
to the Agriculture sector, the Industry sector showed a more robust performance from 2015 -16 to 
2018-19. 
Table  1 Growth in GVA (Gross Value Added) at constant (2011 -12) basic prices (%)  
Year 2014 -15 2015 -16 2016 -17 2017 -18a 2018 -19b 2019 -20c 
Agriculture, forestry and 
fishing  -0.2 0.6 6.8 5.9 2.4 4.0 
Industry  7.0 9.6 7.7 6.3 4.9 0.9 
Mining and quarrying  9.7 10.1 9.8 4.9 -5.8 3.1 
Manufacturing  7.9 13.1 7.9 6.6 5.7 0.03 
Electricity, gas and water 
supply  7.2 4.7 10.0 11.2 8.2 4.1 
Construction  4.3 3.6 5.9 5.0 6.1 1.3 
Services  9.8 9.4 8.5 6.9 7.7 5.5 
Gross value added at basic 
prices  7.2 8.0 8.0 6.6 6.0 3.9 
Gross Domestic Product  7.4 8.0 8.3 7.0 6.1 4.2 
a 2nd Revised estimated.  
b 1st Revised estimated.  
c Provisional estimate . 
Source:  National Statistical Office (NSO), MoSPI.  
2.3.  Sectoral decomposition of the Gross Value Addition (GVA) indicates the increasing importance 
of Services sector to the Indian economy. The share of the services sector in the Gross Value Addition 
(GVA) has increased from 52.3% in 2015 -16 to 54.8% in 2019 -20. On the other hand, the share of 
the agr icultural sector has increased marginally from 17.7% in 2015 -16 to 17.8% in 2019 -20. The 
share of the industry sector declined from 30% in 2015 -16 to 27.5% in 2019 -20. 
Table 2 Percentage share of different sectors in GVA at basic prices ( in %)  
Year Agriculturea Industryb Servicesc 
2015-16 17.7 30.0 52.3 
2016-17 18.0 29.3 52.6 
2017-18 18.0 29.2 52.8 
2018-19 17.1 28.9 54.0 
2019-20d 17.8 27.5 54.8 
a Agriculture includes agriculture, forestry and fishing, mining and quarrying.  
b Industry includes manufacturing, construction, electricity, gas and water supply.  
c Services include trade, hotels and restaurants, transport, storage and communication, financing, real 
estate and business services, community, social and personal services.  
d Provisional Estimate.  
Source:  National Statistical Office, MoSPI.  WT/TPR/G/ 403 • India  
 
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  2.1.2   Savings and investment  
2.4.  Gross domestic savings as a proportion of GDP rose marginally from 32.1% in 2015 -16 to 
32.2% in 2018 -19. Gross Capital Formation, as a proportion of GDP, was 34.5% in 2015 -16 and 
marginally increased to 35.6% in 2018 -19. 
2.1.3   Inflation  
2.5.  India has been experiencing moderation in inflation in the past few years. Retail inflation has 
decreased from 4.9% in 2015 -16 (based on Consumer Price Index -Combined New series) to 3 .4% 
in 2018 -19 (Consumer Price Index -Combined). The high inflation was brought under control 
primarily due to the significant reduction in food inflation. The decline in crude oil prices and the 
introduction of a monetary policy framework for inflation tar geting since August 2016 are some of 
the important factors that have kept the inflation under check. However, CPI has increased during 
the recent months and stood at 6.9 % (provisional) for July 2020 and 6.2% for June 2020 mainly 
due to an increase in food  inflation.  
2.1.4   Employment and labour market scenario  
2.6.  As per the latest estimates based on Periodic Labour Force Survey (PLFS) of India, 2018 -19, 
the share  of the regular wage/salaried employees has increased by 5 percentage points from 18% 
in 2011 -12 to 23% i n 2017 -18 as per usual status. In absolute terms, there was a significant jump 
of around 26.2 million new jobs in this category with 12.1 million in rural areas and 13.9 million in 
urban areas. Moreover, total formal employment increased from 8% to 9.98% d uring this period. In 
absolute terms, the number of workers with formal employment increased from 38 million in 2011 -
12 to 47 million in 2017 -18. 
2.2  Trade Performance  
2.2.1   Merchandise Exports, Imports and Trade Balance  
Total Trade and Trade Deficit  
2.7.  India's total trade in goods (exports plus imports) as a percentage of GDP has shown an uneven 
trend. After declining from 37% in 2015 -16 to 36% in 2016 -17, it showed a steady increase and 
reached 41% in 2018 -19 (Table 3). However, it declined to 37.8% dur ing 2019 -20. The slowdown 
of world output has definitely had an impact on reducing the export to GDP ratio .5 
Table  3 Merchandise trade: exports, imports, trade balance, and trade openness  
Year Value in US D billion  Ratios based on US D 
Exports  Imports  
Trade 
Balance  Exports 
as % of 
GDP Imports 
as % of 
GDP Trade 
Balance as 
% of GDP  Trade 
Openness 
(Trade as 
% of GDP)  Exports  % 
growth  Imports  % 
growth  
2015-16 262.3  -15.5 381.0  -14.9 -118.7  15.1 21.9 -6.8 37.0 
2016-17 275.9  5.2 384.4  0.9 -108.5  15.0 21.0 -5.9 36.0 
2017-18 303.5  10 465.6  21.1 -162.1  14.8 22.8 -7.9 37.6 
2018-19 330.1  8.7 514.0  10.4 -184 16.4 25.5 -9.1 41.9 
2019-20 313.2  -5.11 474.0  -7.80 -160.8  15.0 22.7 -7.7 37.8 
Sources:  DGCIS, RBI, and National Statistical Office (NSO).  
2.8.  In 2019 -20, the major commodity groups in India’s export basket in terms of percentage 
shares were Chemical and Related Products (14.4%), Petroleum Crude and Products (13.2%), Gems 
and Jewellery (11.5%), Textile and Allied Products (10.8%); M achinery and Electrical Appliances 
(9.1%); Agriculture and Allied Products (8.4%); and Base Metals (7.6%).  
 
5 https://www.indiabudget.gov.in/economicsur vey/doc/vol2chapter/echap03_vol2.pdf . WT/TPR/G/ 403 • India  
 
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  Merchandise Trade  
2.9.  During the period 2015 -16 to 2019 -20, India's merchandise exports showed an increasing 
trend during most of the period, increasing at an average annual rate of 1.7% ( Chart  1), with the 
exception of the decline during 2019 -20. In 2018 -19, India’s exports stood at US D 330 billion mark, 
aided by positive growth rates in three preceding years. However, it declined by ( -) 5.1% t o 
USD 313.2 billion during 2019 -20. The decline in exports is attributed to a subdued external demand 
weakened by slowdown in global investment.6 
2.10.   During the five -year period under review (2015 -16 to 2019 -20), imports grew at an average 
annual rate of 1.9% ( Chart  1). In 2019 -20, imports declined by ( -) 7.8% to US D 474 billion as 
compared to US D 514 billion in 2018 -19. The sharp downturn in import was mainly on account of 
fall in industrial production activities and domestic consumption.  
2.11.   In 2019 -20, the following product groups accounted for almost 75% of India’s total imports: 
Petroleum Crude and Products (27.5%); Gems and Jewellery (11.5%); Electronic items (11.1%); 
Machinery (9.5%); and Chemical and Related Products (9.3%).  
Chart  1 Export and import growth rates  
 
2.12.   The merchandise trade deficit, as a percentage of GDP, increased from 6.8% in 2015 -16 to 
7.7% in 2019 -20. During the period from 2015 -16 to 2019 -20, it increased from US D 118.7 billion 
in 2015 -16 to US D 160.8 billi on in 2019 -20 (Chart  2). The heavy dependence on imports of essential 
commodities including crude oil, gas, coal, pulses, edible oils, fertilizers, electronics, footwear, etc. 
has kept India's trade deficit at a high level.  
Chart 2 Merchandise trade: exports, imports and trade balance (USD billion)  
 
Source:  DGCIS  
 
6 https://www.indiabudget.gov.in/economicsurvey/doc/vol2chapter/echap03_vol2.pdf . 
-20%-15%-10%-5%0%5%10%15%20%25%
2015-16 2016-17 2017-18 2018-19 2019-20Exports ImportsFigure 1 Export and import growth rates
-5.1
-7.8
-118.7 -108.5
-162.1-184.0-160.8
-300-200-1000100200300400500600
2015-16 2016-17 2017-18 2018-19 2019-20India's exports India's imports Trade balanceFigure 2 Merchandise trade:  exports, imports and trade balance (USD billion)WT/TPR/G/ 403 • India  
 
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  2.2.2   Direction of merchandise trade  
2.13.   There has been significant market diversification in India's trade in recent years – a process 
that has helped in coping with the sluggish global demand. Region -wise, India's export shares to 
North America and Europe and Central Asia have increased over th e years from 14% and 19% 
respectively in 2014 -15 to 19% and 19.5% respectively in 2019 -20. However, the United States of 
America continues to be the topmost destination for India's exports with a share of 17% followed by 
the United Arab Emirates (9.2%) and  China (5.3%) in 2019 -20. 
2.14.   The share of India's exports to the ASEAN (Association of South East Asian Nations) region 
decreased slightly from 10.25% in 2014 -15 to 10.07% in 2019 -20 and exports to the Middle East 
and North Africa decreased from 21.33% in 201 4-15 to 18.05% in 2019 -20. However, exports to 
South Asia increased slightly from 6.6% in 2014 -15 to 7% in 2019 -20, with high growths to all the 
SAARC (South Asian Association for Regional Cooperation) countries except Sri Lanka and Pakistan. 
Exports to Ch ina grew at 39.2 %, while exports to Japan declined by16.06%, during the period.  
2.15.   As regards imports, the shares of Europe and Central Asia and Middle -East and North Africa 
in India's imports declined from 16.7% and 25.8% respectively in 2014 -15 to 15.5% an d 24.0% 
respectively in 2019 -20. The share of South Asia has reached 0.8% in 2019 -20. The share of North 
America in India's imports has increased from 6.5% to 9.3% during the same period. China is the 
major source of India's imports, accounting for 13.7% o f India's total imports, followed by 
United  States (6.9%), UAE (5.8%) and Saudi Arabia (5.5%) in 2019 -20. 
2.16.   In 2019 -20, the top three trading partners of India were the United States, China, and the 
UAE, with the top slot shifting away from China during the last two years. 
2.2.3   Services trade 
2.17.   Trends in the composition of services exports since 2014 -15 show that the shares of sectors 
such as transport, software and financial services have witnessed a decline in 2019 -20. The share 
of communication services has remai ned unchanged. However, the share of travel and business 
services has increased. Though the share of software services has declined by 2.6 percentage points 
over the same period to reach 43.7% of total services exports in 2019 -20, India’s services exports 
remain largely concentrated in software services. This sector accounts for more than twice the share 
of the second -largest component, business services.  
2.18.   According to the WTO data, India’s share in world’s commercial services exports has risen 
steadily over the past decade to reach 3.5% in 2018, twice the share in world’s merchandise exports 
at 1.7%. India now ranks 8th among the world’s largest commercial services exporters. It continues 
to register strong growth performance relative to the oth er major services -exporting countries as 
well as world services export growth. India's services exports outperformed merchandise exports 
during the period 2015 -16 to 2019 -20, recording a compound annual growth rate (CAGR) of 8.4%, 
higher than the CAGR of m erchandise export (4.7%) during the same period. In 2019 -20, services 
exports registered a growth of 2.5% over the previous year, on the back of robust performance in 
some major sectors like software, business, transportation, travel and communication serv ices. 
Software exports registered a growth of 11.5% in 2019 -20 over 2018 -19. Imports of services 
increased by 1.8% to US D 128 billion in 2019 -20 from US D 126.1 billion in 2018 -19. The major 
categories of services imports included business services, transpo rtation, travel and software 
services. Robust services surplus provides a steady flow of current receipts, financing 53.9% of the 
merchandise trade deficit in 2019 -20 (Table 4).  WT/TPR/G/ 403 • India  
 
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  Table  4 Trade in services (USD billion)  
Period  Exports  Imports  Net 
2013-14 151.8  78.7 73.1 
2014-15 158.1  81.6 76.5 
2015-16 154.3  84.6 69.7 
2016-17 164.2  95.9 68.3 
2017-18 195.1  117.5  77.6 
2018-19 208.0  126.1  81.9 
2019-20 213.2  128.3  84.9 
Source:  RBI. 
2.19.   Recognizing the enormous potential of the services sector, as part of a new initiative, the 
Government of India is giving focussed attention to 12 ‘Champion Sectors in Services’; Information 
Technology and Information Technology enabled Services (IT & ITeS ), Tourism and Hospitality 
Services, Medical Value Travel, Transport and Logistics Services, Accounting and Finance Services, 
Audio Visual Services, Legal Services, Communication Services, Construction and Related 
Engineering Services, Environmental Servic es, Financial Services and Education Services. Nodal 
Ministries/Departments have been identified for finalising and implementing action plans to reali ze 
the full potential of these sectors.  
2.20.   To promote greater trade in services between India and the rest of  the world, Global Exhibition 
on Services (GES) is being organized by the Government every year .7 The main objective of the 
Exhibition is to create a global platform for increased trade in services. It is expected to enhance 
strategic cooperation and deve lop synergies to strengthen multilateral relationships between all 
stakeholders, tap the potential for services' exports and to increase FDI flow in the services sector. 
Other prominent sector specific events (Reverse Buyer Sellers Meets) supported by the Government 
include 'Advantage Health Care India' to promote medical value travel and 'Higher Education 
Summit' to promote the ‘Study in India’ brand.  
2.3  Investment Profile  
2.3.1   Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI)  
2.21.   During 2019 -20, FDI inflows reached an all -time high of US D 74.39 billion (Table 5),  
registering an increase of 20% over the corresponding period a year ago. Singapore, Mauritius, 
Netherlands, US, and Japan, have been the major sources of FDI flows to India in 2019 -20. Th e 
major FDI recipient sectors include services sector, computer software and hardware, 
communications services, financial services, retail and wholesale trade and financial services.  
Table  5 FDI Inflows and Net FPI (US D billion)  
Financial Year  Total FDI In flows  Net FPI  
2013-14 36.0 5.0 
2014-15 45.1 40.9 
2015-16 55.6 -4.0 
2016-17 60.2 7.0 
2017-18 61.0 22.0 
2018-19 62.0 -2.2 
2019-20 74.4 0.6 
Source:  RBI. 
 
7 https://www.gesindia.in/ . WT/TPR/G/ 403 • India  
 
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  2.22.   There was a net FPI inflow to the tune of U SD 0.6 billion in 2019 -20 as against net outflow of 
USD 2.2 billion a year ago. The modest net FPI inflow in 2019 -20 was on account of huge sell -off in 
March 2020 induced by COVID -19 related concerns.  
2.3.2   Outward investment by India  
2.23.   Net outward FDI by India has shown a mixed trend during the review period returning figures 
of US D 9.2, 4, 8.9, 6.6, 9.1, 12.6, and 13 billion in the years from 2013 -14 to 2019 -20. The major 
destinations of India’s outward FDI in 2019 -20 included Singapore, the US, the UK, Mauritius a nd 
Switzerland. Financial, insurance and business services sector accounted for the largest share in 
outward FDI by India in 2019 -20, followed by manufacturing, wholesale and retail trade, restaurants 
and hotels, transport, storage and communication servic es and construction.  
2.4  Monetary and Fiscal Policy  
2.24.   The Government amended the Reserve Bank of India Act, 1934 in May 2016 to provide for a 
revised monetary policy framework. Under the amended Act, the inflation target is to be set by the 
Government, in consultation with the Reserve Bank, once every five years. It further provides for a 
statutory basis for the constitution of an empowered Monetary Policy Committee (MPC). The 
Government has fixed the inflation target of 4% with a tolerance l evel of +/ - 2 % for the period 
beginning from 5th August 2016 to 31st March 2021 .8 
2.25.   Fiscal deficit of the Government of India as a per  cent of GDP averaged 3.62% during 2015 -
16 to 2019 -20 (RE). Central Government debt which was budgeted at 48% of GDP in 20 19-20 has 
been revised upwards to 50.3% of GDP in RE 2019 -20. This is mainly on account of allowing a fiscal 
deficit of 3.8% of GDP in RE 2019 -20. As a percentage of GDP, Central Government debt is expected 
to marginally decline to 50.1% in 2020 -21 and at a higher pace in projection years to reach 45.5% 
in 2022 -21. The borrowings are expected to reduce in the medium term with increased revenue 
collections .9 
3  REFORMS: ECONOMIC POLICY AND OTHER INITIATIVES  
3.1  Economic Reforms and Better Delivery of Services  
3.1.1   Good s and Services Tax (GST)  
3.1.  The introduction of the Goods and Services Tax (GST), which came into effect on 1st July 2017, 
was a very significant step in the field of indirect tax reforms in India. By amalgamating a large 
number of Central and State taxes int o a single tax, GST aims to mitigate the ill effects of cascading 
or double taxation and paves the way for a common national market. The GST replaces taxes such 
as the Central Excise Duty, Service Tax, State Value -added Tax, Octroi, Luxury Tax, Purchase Ta x, 
etc. The introduction of GST is aimed at full neutralization of input taxes across the value chain of 
production and distribution. This is expected to make Indian products competitive in the domestic 
and international markets. The Government has made co ncerted efforts to improve the tax 
compliance and tax revenue collection through extensive automation of business processes, 
application of e -way bill mechanism, targeted action on compliance verification, enforcement based 
on risk assessment and proposed introduction of electronic invoice system.  
3.1.2   Insolvency and Bankruptcy Code  
3.2.  The Insolvency and Bankruptcy Code10, which was enacted in 2016, provides a mechanism for 
the insolvency resolution of debtors in a time bound manner. This seeks to enable maximisation of 
the value of their assets, with a view to promote entrepreneurship, availability of credit and balance 
the interests of all the stakeholders. The Code separates commercial aspects of insolvency and 
bankruptcy proceedings from judicial aspec ts. It empowers and facilitates the stakeholders and 
Adjudicating Authority to decide matters within their respective domain expeditiously.  
 
8 https://www.rbi.org.in/Scripts/PublicationsView.aspx?id=19439 . 
9 https://www.indiabudget.gov.in/doc/frbm2.pdf . 
10 https://www.ibbi.gov.in/legal -framework/act . WT/TPR/G/ 403 • India  
 
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  3.1.3   Merger of public sector banks  
3.3.  In principle, it is expected that mergers generate synergies in rationalisation of wor kforce, 
streamlining of operations with significant improvements in efficiency, better risk management 
practices and rationalisation and more efficient allocation of capital. Specific to the banking system, 
it is also expected to lead to diffusion of best practices across the board. It is likely to aid a more 
organised expansion of banking operations, thereby furthering the Government’s objective of 
financial inclusion. Keeping in view the above potential benefits of consolidation, two public sector 
banks n amely Vijaya Bank and Dena Bank were amalgamated with the Bank of Baroda from 1st April 
2019. In continuance of the process, 10 public sector banks were subsequently amalgamated into 
four entities (Oriental Bank of Commerce and United Bank of India were me rged with the Punjab 
National Bank; Syndicate Bank with the Canara Bank; Andhra Bank and Corporation Bank with the 
Union Bank of India; and Allahabad Bank with the Indian Bank) from 1st April 2020. This is expected 
to create the next generation banks with strong national and global presence .11 
3.1.4   Government e -marketplace  
3.4.  Government e -Marketplace (GeM -SPV) was set up as the National Public Procurement Portal 
on 17th May 2017 .12 Incorporated as a 100% Government owned Company for providing 
procurement of goods and services by Central and State Government organisations, GeM  provides 
an open inclusive platform for the vendors (OEM, resellers, service providers) to register and list 
their product s/services without any entry barriers. There is no registration fee or listing fee in  GeM. 
It is a contactless, paperless and cashless platform wherein authentication of users is done through 
API integration. As of August 2020, there are more than 46,230 G overnment Organizations and over 
447,000 vendors registered on the portal. Further, more than 7,889 product categories comprising 
approximately 2.17 million products and 135 services are available on  GeM. 
3.1.5   Make in India  
3.5.  The ‘Make in India’ initiative was la unched in 2014, with the primary goal of making India a 
global manufacturing hub. This is sought to be achieved through facilitating investment, fostering 
innovation, enhancing skill development, and building best -in-class manufacturing infrastructure. 
This initiative has been reviewed afresh and is now focusing on 27 sectors [15 manufacturing sectors 
and 12 service sectors] under Make in India 2.0. The potential investors are being attracted by 
dedicated Government agencies as well as the State Governments  and Indian Missions abroad. An 
Investment Clearance Cell has been established as a one -stop digital platform to obtain all requisite 
central and state clearances/approvals required. This is supported by a GIS -enabled land bank for 
investors to look at ava ilable plots and land use patterns in different areas, on an online platform. 
An Empowered Group of Secretaries to the Government of India, led by the Cabinet Secretary, has 
also been constituted to take decisions on cross cutting policy issues for facilit ating and speeding up 
domestic and foreign investment. Simultaneously, Project Development Cells (PDC) for the 
development of investible projects have also been created in the different administrative ministries 
for expedited coordination between the Centr al Government and State Governments. These steps 
reinforce the Government’s commitment towards promoting India as a favourable investment 
destination across the globe, along with improving ease of doing business for the investors.  
3.1.6   Digital India  
3.6.  Digital Ind ia13 is a flagship programme of the Government of India with a vision to transform 
India into a digitally empowered society and knowledge economy. The Digital India programme is 
centred on three key vision areas: Digital Infrastructure as a Core Utility to  Every Citizen; 
Governance and Services on Demand; and Digital Empowerment of Citizens. Digital India aims to 
provide the much -needed thrust to the nine pillars of growth areas, namely Broadband Highways; 
Universal Access to Mobile Connectivity; Public Int ernet Access Programme; e -Governance: 
Reforming Government through Technology; e -Kranti: Electronic Delivery of Services; Information 
 
11 https://pib.gov.in/PressReleasePage.aspx?PRID=1605147#:~:text=2020%20and%20would 
%20result%20in,effectively%20in%20India%20and%20globally . 
12 https://gem.gov.in/ . 
13 https://digitalindia.gov.in/ . WT/TPR/G/ 403 • India  
 
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  for All; Electronics Manufacturing; IT for Jobs; and Early Harvest Programmes. Each of these areas 
is a comprehensive prog ramme in itself and cuts across multiple Ministries and Departments.  
3.1.7    Startup India  
3.7.  Startup India14 is a flagship initiative of the Government of India, which intends to build a 
strong ecosystem conducive for the growth of startup businesses and generating  large scale 
employment opportunities. Under this initiative, the Government aims to empower startups to grow 
through innovation and design. Several programmes have been undertaken since the launch of the 
initiative on 16th of January 2016. These programme s have catalysed the startup culture, with many 
entrepreneurs availing the benefits of starting their own business in India. Under the Startup India 
initiative, eligible companies can get recogni zed as Startups by the Government. This enables them 
to acces s easier compliance, IPR fast -tracking and obtain certain benefits such as rebate in 
patent/trademark filing fees, etc. As on 31st July 2020, 34,226 startups have been recognized under 
the initiative.  
3.1.8   Skill Development  
3.8.  India is one of the youngest nations in the world. To meet the challenge of skilling the young 
population, the Ministry of Skill Development and Entrepreneurship (earlier Department) was set up 
in November 2014 to drive the ‘Skill India’ agenda in a ‘Mission Mode’. This seeks to converge 
existing skill training initiatives and combine scale and quality of skilling efforts, with speed. Pradhan 
Mantri Kaushal Vikas Yojana (PMKVY) is the flagship scheme of the Ministry of Skill Development & 
Entrepreneurship (MSDE) implemented by National Skill D evelopment Corporation. The National Skill 
Development Mission was launched on 15th July 2015 on the occasion of World Youth Skills Day to 
achieve the vision of ‘Skilled India’. It seeks to provide the institutional capacity to train a minimum 
of 300 milli on skilled people by the year 2022. As on 17th January 2020, 4.03 million candidates 
have been trained under Short Term Training (STT) courses. Out of these certified candidates, 
1.6 million candidates have been provided with placement opportunities.  
3.1.9   Direc t Benefit Transfer  
3.9.  Direct Benefit Transfer (DBT) is a governance reform initiative aimed at improving the overall 
public service delivery in India. The design and delivery mechanism in implementing DBT programs 
in India has continuously evolved with greater use of JAM i.e., Jan Dhan (a nationwide financial 
inclusion scheme for opening of low value transaction accounts through Pradhan Mantri Jan Dhan 
Yojna), Aadhaar (India’s National digital identity, used for identification and authentication of 
beneficiaries) and Mobile. DBT  has been able to contribute to “Faceless, Paperless, Cashless” 
economy and achieve greater transparency, better targeting, timely delivery of benefits, improved 
accountability and reduced cost of delivery and leakages across public programs.  
3.1.10   Mudra Mission  
3.10.   The Pradhan Mantri Mudra Yojana (PMMY)15 was launched on 8th April 2015 for providing loans 
up to ₹ 1 million to the non -corporate, non -farm small/micro -enterprises. These loans are classified 
as MUDRA loans under PMMY and are given by Commercial Banks, R egional Rural Banks (RRBs), 
Small Finance Banks (SFBs), MFIs (Micro -Finance Institutions) and Non -Bank Finance Companies 
(NBFCs). The borrowers can approach any of these lending institutions mentioned above or can 
apply online through a dedicated portal. T he Micro Units Development and Refinance Agency Ltd. 
(MUDRA) has been set up by Government for providing refinance support to financial institutions 
which are in the business of lending to micro/small business entities engaged in manufacturing, 
trading and  service activities. Under the aegis of PMMY, MUDRA has created three products, namely 
'Shishu' (covering Loans up to ₹ 50,000), 'Kishore' (covering Loans from ₹50,000 to ₹ 500,000) and 
'Tarun' (covering Loans from ₹ 500,000 to ₹ 1 million) to signify the stage of growth/development 
and funding needs of the beneficiary micro unit/entrepreneur and also provide a reference point for 
the next phase of graduation/growth. The total number of PMMY loans sanctioned from 2015 -16 till 
2020-21 (up to 7th August 2020)  are 250 million with the amount sanctioned being ₹ 12.7 trillion.  
 
14 https://www.startupindia.gov.in/ . 
15 https://www.mudra.org.in/#:~:text=MUDRA%20Mission,economic%20success%20and%20financial 
%20security.%22 . WT/TPR/G/ 403 • India  
 
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  3.2  Labour Policy Reforms  
3.11.   A number of initiatives have been taken for strengthening the safety, security, health, social 
security for every worker and bringing ease of compliance for running an  establishment to catalyse 
creation of employment opportunities.  These initiatives include governance reforms through use of 
e-governance measures and legislative reforms by simplifying, amalgamating and rationalizing the 
existing 29 labour laws into 4 lab our codes i.e. the Code on Wages; the Occupational, Safety and 
Health and Working Conditions Code; the Industrial Relations Code; and the Code on Social Security. 
These codes ensure minimum wages along with timely payment of wages to all the employees and 
workers as well as random risk -based jurisdiction -free inspection through a centralised computer 
system for greater accountability and transparency.  
3.12.   To encourage female participation in the economy, various programmes/legislative reforms 
are also in place.  A number of protective provisions have been incorporated in various labour laws 
for creating a congenial work environment for women workers, such as child care centres, time -off 
for feeding children, enhancement in paid maternity leave from 12 weeks to 26  weeks, provisions 
for mandatory crèche facility in the establishments having 50 or more employees, permitting women 
workers in the night shifts with adequate safety measures, etc.  
3.13.   A unified Web Portal ‘Shram  Suvidha Portal’ has been launched to bring transparency and 
accountability in enforcement of labour laws and ease the complexity of compliance, uploading of 
inspection reports within 48 hours and timely redressal of grievances .16 
4  EASE OF DOING BUSINESS AND TRADE FACILITATION  
4.1.  Trade is a vital aspect of India’s development strategy and an enabler of country’s economic 
competitiveness. The  Government has accordingly taken several measures to ease the trading 
environment by facilitating various infr astructural and functional simplifications for businesses. With 
these objectives in mind, India has also ratified the WTO Trade Facilitation Agreement (TFA) on 22nd 
April 2016. The trade facilitative measures initiated by the Government have been instrumen tal in a 
drastic reduction of the time and costs of border and documentary compliances for exports and 
imports in the last few years. This is reflected in the country’s ranking of 68 on the Trading Across 
Borders indicator in the World Bank’s Doing Busines s Report 2019, a vast improvement from 126 in 
2015. Some of the facilitative measures undertaken for ease of businesses include:  
• Introduction of Goods and Service Tax, which has removed a plethora of taxes at the Central 
and at the State level.  
• Reduction of the corporate tax rate from 30% to 22% for mid -sized enterprises with a 
turnover of up to ₹ 4 billion.  
• Implementation of ‘India Customs Single Window’ to allow traders the facility to lodge their 
clearance documents online at a single point. This is sup ported by the e -SANCHIT portal 
which enables the online uploading of supporting documents by the trade.  
• Introduction of the post clearance audit of consignments identified by the Risk Management 
System (RMS). This has reduced the number of consignments tha t need to be inspected on 
arrival.  
• Increased facilitation by Indian Customs through the digitized Authorized Economic Operator 
(AEO) program.  
• Direct Port Delivery and Direct Port Entry facilitating faster clearances at the ports.  
 
16 https://sh ramsuvidha.gov.in/home . WT/TPR/G/ 403 • India  
 
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  • Creation of e -CoO platfor m, which has enabled electronic issuance of the certificate of origin 
for preferential exports. This shall also facilitate the online exchange of such certificates with 
the FTA partner countries.17 
• 24x7 self -Generation of  e-IEC (Importer Exporter Code) has been enabled for  facilitating  
exporters and easing  service delivery.  
• New initiatives like TURANT Customs aiming to make customs clearance faster, faceless, and 
direct contact -free. 
• Suo Motu clearance to low risk consignments, along with the insta llation of drive -through 
scanners at the major ports, beginning with the Jawaharlal Nehru Port, Nhava Sheva, Navi 
Mumbai (the biggest port in India), which has led to a significant reduction in processing 
time. 
• Creation of a new Logistics division for coor dinating with all stakeholders in bringing 
efficiency in the logistics ecosystem.  
• Introduction of the Insolvency & Bankruptcy Code, 2016 providing for time bound procedure 
for disposal of corporate insolvency, thereby limiting the possibility of delays in the process .18 
• Providing electricity connection within 7 days if no Right of Way (RoW) is required and within 
15 days where RoW is applicable.  
• Easing the starting of a business by fast -tracking incorporation of a company with a single 
application for reser vation of name, incorporation of a new company and/or application for 
allotment of DIN, and abolishing filing fees for such companies.  
• Reduction in time and cost of obtaining construction permits by streamlining the associated 
processes.  
4.2.  As a part of India ’s commitment under the TFA (under Article 23.2 of the TFA), a National 
Committee on Trade Facilitation (NCTF) has been set up under the Chairmanship of the Cabinet 
Secretary. This Committee periodically reviews the implementation of the TFA and facilitate s 
domestic co -ordination  towards it. Formulation of the National Trade Facilitation Action Plan (NTFAP) 
2017-2020 was an early measure by the NCTF. The NTFAP has been envisioned as a live document 
containing 96 specific measures assigned to stakeholders wi th indicative timelines for 
implementation. The commitments underlined therein are the commitments under the TFA as well 
as TFA+ commitments related to infrastructure and technology adoption. The collective aim of these 
measures is to enable a reduction in  the overall release time associated with the clearance of goods 
with regards to:  
• Imports – less than 48 hours for Sea / ICD / ICP and less than 24 hours for Air  
• Exports – less than 24 hours for Sea / ICD / ICP and less than 12 hours for Air  
4.3.  To operationalize the NTFAP, a three -tiered institutional mechanism has been formulated to 
monitor progress and guide appropriate course correction when needed. The apex body of this 
institutional mechanism, i.e. the NCTF, is chaired by the Cabinet Secreta ry to the Government of 
India and has representatives of all involved stakeholders. The apex committee is supplemented in 
its functions by a Steering Committee which contains a core group of public and private stakeholders, 
and is chaired jointly by the Co mmerce Secretary and Revenue Secretary. These committees are, in 
turn, supported by Working Groups with experts from relevant institutions entrusted with a specific 
trade facilitation measure or project.  
4.4.  For the period 2020 to 2023, a new NTFAP is under pr eparation with a vision to take additional 
reforms to bolster trade facilitation efforts and transform the cross -border clearance eco -system 
through efficient, transparent, risk based, coordinated, digital, seamless and technology -driven 
 
17 https://coo.dgft.gov.in/#:~:text=This%20common%20digital%20platform%20is,to%20work% 
20through%20thi s%20portal . 
18 https://www.ibbi.gov.in/legal -framework/act . WT/TPR/G/ 403 • India  
 
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  procedures. These would be supported by state -of-the-art seaports, airports, land border crossings, 
rail, road and other logistics infrastructure.  
4.5.  India has been making proactive strides in TFA implementation under the overall guidance of 
the NCTF. While India’s TFA commitm ents breakup stands at 72.3% for category ‘A’ and 27.7% for 
category ‘B’, many of the category ‘B’ commitments, which are otherwise due by 2022, have already 
been fulfilled viz. Establishment of a Single Window (Article 10.4), Risk Management for clearance  
of goods (Article 7.4), usage of Post Clearance Audit in risk management (Article 7.5.4), etc. This 
reflects India’s commitment towards facilitation of trade with an emphasis on transparency and 
openness.  
5  TRADE AND INVESTMENT POLICIES  
5.1.  International trade is an important part of India's economy. The Foreign Trade Policy (FTP) of 
India, the basic framework of policy and strategy for promoting trade, has conventionally been 
formulated for five years at a time, and reviewed periodically. The FTP for 2015 -20, announced in 
April 2015, provided a framework for increasing exports of goods and services as well as generation 
of employment and increasing value addition in the country. A mid -term review of FTP was 
undertaken after the introduction of Goods and Services  Tax on 1st July 2017, and a revised FTP was 
announced on 5th December 2017 .19 
5.2.  While framing the FTP, one of the objectives is to align it with India’s rights and obligations 
under various WTO Agreements as well as the domestic policy requirements. This is  evident from 
the FTP statement which clearly stipulates that in the trade negotiations including the Doha Round 
issues, India will continue to work towards removing any asymmetries in the multilateral trade rules 
which place a developing country at a disa dvantage .20 India's foreign trade policy reflects its 
unwavering commitment to trade liberalization and deeper integration with the global economy.  
5.3.  The FTP is aimed to provide a stable and sustainable policy environment for foreign trade in 
merchandise and  services, consistent with WTO rules. The FTP is also aligned with the broader 
priorities of the Government of India such as the implementation of ‘Goods and Services Tax’, ‘Digital 
India’, ‘Skill India’, ‘Startup India’ and Trade Facilitation initiatives.  Various provisions of FTP are 
aimed at trade facilitation by cutting down the transaction cost and time, thereby rendering Indian 
exports more competitive.  
5.4.  The FTP is regularly updated with the changing trade paradigm. Recent thrust being on 
simplificatio n of policy and procedures, reducing manual intervention, e -communication of 
authorizations, e -verification, and immediate resolution of policy, procedure and systems related 
issues. This renewed intent has increased the credibility of service delivery.  
5.5.  The outbreak of COVID -19 has created turmoil in global trading environment, leading to 
uncertainties, and the Governments ' attention world over is focused on dealing with the pandemic. 
Because of these circumstances, the FTP 2015 -20, has been extended by one  year. 
5.1 FDI Policy  
5.6.  It has been the continuous endeavour of the Government of India to put in place an enabling 
and investor friendly FDI Policy, and over the past 5 years Government has undertaken a number 
of reforms in foreign investment.  
5.7.  The measures taken by the Governmen t are aimed at opening new sectors for foreign direct 
investment, increasing the sectoral limit of existing sectors and simplifying other conditions of the 
FDI policy. To this extent, Government has done away with the erstwhile regulatory board, in order 
to simplify the approval process of foreign investment and to provide ease of doing business for the 
investors. Under the new regime, the process for granting FDI approvals has been simplified and 
the work relating to the processing of applications is now h andled by the Ministries/ Departments 
 
19 https://content.dgft.gov.in/Website/NotificationNo41MidTermReviewofFTPEnglish.pdf . 
20 https://content.dgft.gov.in/Website/ftpst17 -051217%20(3).pdf . WT/TPR/G/ 403 • India  
 
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  concerned. This has been a major breakthrough in easing regulatory conditions and multiple 
processing by different ministries.  
5.8.  Reforms have been carried out across sectors such as Defence, Insurance, Pension, Other 
Financial Services, Asset reconstruction Companies, Broadcasting, Pharmaceuticals, Single Brand 
Retail Trading, Construction and Development, Civil Aviation, Power Exchanges, e -commerce 
activities, Coal Mining, Contract Manufacturing, Digital Media etc. FDI u p to 100% is now permitted 
under the automatic route in most sectors/activities.  
5.2  Intellectual Property Rights (IPRs)  
5.9.  National IPR Policy for India was adopted by the Government of India on  12th May 2016, as a 
vision document that lays the future roadmap of IPRs in India .21 The Policy lays down objectives 
such as awareness, generation of IPRs, legal and administrative framework, enforcement, 
commerciali zation of IPRs etc. Effective enforcement of  the IPRs has been the focus area for the 
Government. Indian customs has been regularly intercepting and seizing imported goods infringing 
intellectual property rights, with the total value of seized imported goods for violation of IPRs being 
₹ 3.8 billion during the period 1st April 2017 -31st March 2020. Government of India has also 
developed an IPR enforcement toolkit for both Police as well as Customs Officials. This Enforcement 
toolkit provides: (i) information on legal provisions relevant to IPR  crime, (ii) a checklist for 
registering a complaint, (iii) a checklist for search and seizure, and (iv) proposed guidelines for 
search and seizure in the case of IP crimes.  
6  INDIA AND THE WTO: STRENTHGETHING MULTILATERAL SYSTEM  
6.1.  India attaches great value t o the WTO and the indispensable role of the institution in the rules -
based multilateral trading system. As a staunch supporter of the rules -based multilateral trading 
system, India is deeply concerned at developments that appear to undermine the WTO. India , thus, 
intends to do its best to address the challenges confronting the WTO, and also seeks to ensure that 
global trade rules foster economic development in developing countries.  
6.1  Appellate Body  
6.2.  At the core of a functioning multilateral trading system is a n effective dispute resolution 
mechanism. The dispute settlement system has led to meaningful reductions in unfair trade practices 
and has helped to strengthen the rules -based international trading system . 
6.3.  As a firm supporter of the rules -based multilatera l trading system, India believes that an 
independent, effective and binding two -stage dispute settlement system of the WTO is a central 
element in providing security and predictability to the multilateral trading system. India 
constructively engaged on the  Appellate Body issues, and co -sponsored two proposals to resolve the 
Appellate Body impasse. India strongly underlines the importance of restoring the Appellate Body 
expeditiously and in a manner that preserves the essential features of a two -tier dispute  settlement 
system, negative consensus and independence of the dispute settlement mechanism.  
6.2  WTO Reform  
6.4.  The resolution of the impasse in the Appellate Body must precede other reforms, as there is 
little incentive in negotiating new rules in the absence of an independent and effective guarantor of 
those rules. The agenda for WTO reform must be development centric, preserving the core values 
of the multilateral trading system, strengthening the provisions of special and differential treatment 
in existing and future agreements. It must also preserve the multilateral character of WTO, including 
consensus -based decision making. In order to be widely acceptable, discussions on WTO reform 
should be premised on the principles of inclusivity and equity.  
6.5.  A good starting point for the reform agenda would be removing existing imbalances in the 
Agreement on Agriculture and ensuring a level playing field, particularly for developing economies. 
As a long -standing proponent of WTO reform, India has sought the elim ination of unequal and trade -
distorting entitlements in the Agreement on Agriculture for almost 20 years. Another positive step 
 
21 https://dipp.gov.in/sites/default/files/National_IPR_Policy_English.pdf . WT/TPR/G/ 403 • India  
 
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  would be to build upon the work of the last several years and to implement existing mandates such 
as a simple and effective perm anent solution for public stock holding for food security purposes. This 
would help in enhancing the trust of developing countries in the WTO’s negotiating arm.  
6.3  Special and Differential Treatment  
6.6.  Special and differential treatment for all developing countr ies, including LDCs, is a core principle 
of the WTO and preserving it should be an overriding priority of WTO Members. This provision was 
incorporated in recognition of the wide gap between standards of living in less -developed countries. 
While some develo ping Members may have made progress, the gaps in the levels of development 
still persist and have even widened in some areas. Further, new divides, especially in the digital and 
technological spheres, have become more pronounced. Therefore, the continued a vailability of 
special and differential treatment for these countries is imperative for them to address their 
development aspirations.  
6.7.  The premise that developing country Members, who consider themselves in a position to do 
so, may voluntarily decide to fo rgo the S&DT in current and future negotiations appears to be a 
more acceptable solution.  
6.4  Fisheries Subsidies  
6.8.  There is an urgent need for strong disciplines to regulate certain harmful fisheries subsidies to 
ensure the sustainable use of marine resources f or securing inter -generational equity. At the same 
time, we need to be cognizant of the existence of a large population of subsistence artisanal and 
small -scale fishermen in developing countries, including LDCs, who rely on fishing for their basic 
liveliho od. They have no other livelihood options, and we are all responsible to care for this 
vulnerable population of marginalized fishermen. This is precisely why both SDG 14.6 and the MC11 
decision on fisheries, clearly mandate that there should be appropriate  and effective special and 
differential treatment for developing countries including LDCs. Moreover, the present state of affair 
of the marine fisheries is on account of the big subsidizers’ and not countries like India. Moreover, 
adequate policy space is required to ensure a decent standard of living for our subsistence, artisanal  
and small -scale fishermen. Any discipline without considering these concerns would lead to complete 
imbalance between the elements of the discipline and the livelihood needs of t hose fishermen. India 
has been actively and constructively engaged in the negotiation of fisheries subsidies.  
6.5  Services  
6.9.  India has been playing a constructive role in services negotiations in the WTO. India has made 
efforts to reinvigorate the Work Program on Electronic Commerce with the belief that as the digital 
revolution is still unfolding, it is important to first understand the complex and multi -faceted 
dimensions of issues related to e -commerce. India has accordingly been a proponent of 
strengthening the multilateral work under the non -negotiating and exploratory work program on 
e-commerce. Further, India has also been making efforts to reinvigorate multilateral discussions on 
disciplines on Domestic Regulations, which are necessary for ensuring ease, transparency and 
predictability in services’ trade, particularly with regard to the movement of professionals.  
6.10.   India notified its preferential treatment to services and service suppliers of LDCs in September 
2015. Under this LDC Services waiver, waiver of visa fee for LDC applicants seeking Indian business 
and employment visas (India is the only WTO Member which offered to waive visa fees for LDC 
applicants), technical assistance and capacity building, and Market access i.e. commitments in 
various sectors a nd subsectors and access for a number of categories of Mode 4 professionals from 
LDCs, have been provided to the Least Developed Countries.  
7  INDIA'S BILATERAL TRADE ENGAGEMENTS: UNLOCKING MUTUAL BENEFITS  
7.1.  In order to put the trade on a high growth trajectory , India has engaged actively with the 
external market and diversified its strategy based on the changing dynamics of commerce and 
economic growth in the world economy. In future, India seeks to engage with regions and countries 
that have complementarities with the Indian economy. India views regional trade agreements (RTAs) 
and preferential trading arrangements (PTAs), as "building blocks" towards achieving the overall 
objective of trade liberalization/harmonisation of Tariffs and Non -tariff Measures. India 's initial foray WT/TPR/G/ 403 • India  
 
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  into RTAs was through the Bangkok Agreement (1975), the Global System of Trade Preferences 
(GSTP, 1988), and the SAARC PTA (SAPTA, 1993). India's important trade engagements are briefly 
discussed in this section.  
7.1  South Asia Region  
7.2.  The seven -member countries of SAARC (India, Pakistan, Nepal, Sri Lanka, Bangladesh, Bhutan, 
and the Maldives) signed the Agreement on South Asian Free Trade Area (SAFTA) in the year 2004 
which was joined by Afghanistan as the eighth member in 2007. The signing  of the SAARC 
Agreement on Trade in Services (SATIS, 2010) has deepened the engagement. In addition, India 
has bilateral trade agreements providing preferential market access to Bhutan and Nepal, a 
preferential trade agreement (PTA) with Afghanistan (2003) , and a free trade agreement with 
Sri Lanka (1998), which is being expanded into a Comprehensive Agreement covering trade in 
services and investment.  
7.2  South East and East Asia  
7.3.  The India ASEAN Trade in Goods Agreement became operational from January 2010 onw ards 
(with different dates for ASEAN countries). The Services and Investment Agreement entered into 
force on 1 July 2015. Besides this, India’s deepening economic and commercial engagement with 
South East Asia is evident from the following agreements: a bi lateral agreement with Thailand 
(2004), a Comprehensive Economic Cooperation Agreement (CECA) with Singapore (2005), a 
Comprehensive Economic Cooperation Agreement (CECA) with Malaysia (2011). The India -Republic 
of Korea Comprehensive Economic Partnership Agreement (CEPA) came into force in January 2010, 
while that with Japan came into force in August 2011.  
7.3  Australia and New Zealand  
7.4.  Negotiations with New Zealand and Australia for a comprehensive agreement, were launched 
in 2010 and 2011, respectively. The scope of the negotiations cover trade in goods, services, 
investments, apart from other areas of economic cooperation. Ten rounds of negotiation under India 
- New Zealand CECA has been held so far, while nine rounds of negotiations have b een held for India 
– Australia CECA.  
7.4  Americas  
7.5.  Limited scope preferential trade agreements were signed with MERCOSUR and Chile in 2004 
and 2006, respectively. India is in the process of expanding these agreements by widening the 
product coverage and deepeni ng preferences. India and Canada launched negotiations in 2010 for 
a Comprehensive Economic Partnership Agreement (CEPA), covering trade in goods, services, 
investments and economic cooperation and so far, ten rounds of negotiation have been held. Five 
rounds of negotiations under India Peru FTA have also taken place so far.  
7.5  Europe  
7.6.  India began negotiating a Bilateral Trade and Investment Agreement (BTIA) with the European 
Union in 2007. Sixteen rounds of negotiations were held until 2013. Resumption of nego tiations is 
being explored. The India - EFTA TEPA (Trade and Economic Partnership Agreement) between India 
and the four -member EFTA was launched in 2008, with seventeen rounds of negotiations till date. 
India is also engaged with the UK for a Trade Partners hip as it assumes charge of its international 
trade policy.  
7.6  CIS 
7.7.  India has been engaging with the EAEU countries for a bilateral trade arrangement, with the 
first round of technical consultations held in January 2018 in New Delhi.  WT/TPR/G/ 403 • India  
 
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  7.7  Middle East and Africa  
7.8.  India is negotiating a preferential agreement with the Southern African Customs Union (SACU). 
Negotiations are also underway for FTAs with the Gulf Cooperation Council (GCC), Israel and 
Mauritius. India is also in discussion with Iran for a limited trade agre ement.  
7.8  Other Agreements and Negotiations  
7.9.  India is one of the members of the Global System of Trade Preferences (GSTP) which is an 
agreement among 43 developing countries and intended to promote South - South trade. India 
participated in the third round of n egotiations (known as the Sao Paulo Round) which was concluded 
in 2010. However, as of January 2015, only 3 countries namely Cuba, India and Malaysia have 
submitted their schedules of concessions. It would be ratified only if a fourth participating country  
submits its schedule.  
7.10.   The Asia Pacific Trade Agreement (APTA, 2005), operational among six countries, namely, 
Bangladesh, China, India, Lao PDR, the Republic of Korea, and Sri Lanka, has been the result of re -
negotiations on the text of the Bangkok Agreem ent (1975). India, as a member of a regional group 
consisting of Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, Thailand (BIMSTEC, 1997), is 
also negotiating an FTA in goods, services and investment amongst the members.  
8  CHALLENGES  
8.1  Manufacturing Chal lenge  
8.1.  Manufacturing sector currently contributes about 17% of the Gross Value Addition, accounting 
for less than 2% of the global manufacturing output. Growth of the manufacturing sector had 
declined from 6.6% in 2017 -2018 to 5.7% in 2018 -19 and further di pped to 0.03% in 2019 -20. 
Production of the eight core industries grew by 4.4% in 2018 -19, as compared to 4.3% in 2017 -18. 
During 2019 -20, the growth rate, however, dipped to 0.4%, mainly due to reduced lending by NBFCs 
owing to liquidity crunch, and taper ing of domestic demand for key sectors such as automotive, 
pharmaceuticals, machinery & equipment, etc .22 
8.2.  It is essential to boost industrial growth in general  and manufacturing growth in particular, so  
that the large number of workers joining the workforce get productive employment. Industrial 
growth would also accelerate growth in the services sector, improving the capacity of the economy 
to absorb the additional workforce and grow at a buoyant pace. T his is a sine -qua-non if India’s GDP 
is to reach the US D 5 trillion mark by 2025.  
8.2  Infrastructure Development  
8.3.  Infrastructure is critical for growth. To realize the vision of a US D 5 trillion economy by 2024 -
25, India needs to spend US D 1.4 trillion between 2019-20 and 2024 -25. In view of this, the National 
Infrastructure Pipeline (NIP)23 has been launched for 2020 -2025. The NIP has projected an 
investment of approximately US D 1.4 trillion and will work on Centre -State -Private Participation 
model. The boost t o the infrastructure will improve the competitiveness of the country by addressing 
supply side bottlenecks. Enhanced investment in infrastructure will also increase demand in the 
economy and improve the quality of life of the people of the country.  
8.4.  A Smart  Cities Mission has been launched by the Government to promote cities that provide 
core infrastructure and give a decent quality of life to its citizens, a clean and sustainable 
environment and application of ‘Smart’ Solutions .24 The focus is on sustainable and inclusive 
development by creating a replicable model which will act like a light house to other aspiring cities. 
100 cities have been selected for the Mission and a total of 5,151 projects worth ₹ 2.05 trillion have 
been pr oposed as part of their Smart City Proposals. The implementation of the Mission at the City 
level is being done by a Special Purpose Vehicle (SPV) created for the purpose. This SPV will plan, 
appraise, approve, release funds, implement, manage, operate, mo nitor and evaluate the Smart 
 
22 https://www.indiabudget.gov.in/economicsurvey/doc/vol2chapter/echap08_vol2.pdf . 
23 https://indiainvestmen tgrid.gov.in/national -infrastructure -pipeline . 
24 http://smartcities.gov.in/content/ . WT/TPR/G/ 403 • India  
 
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  City development projects. The Smart Cities are expected to complete their projects within 5 years 
from the date of their selection.  
8.5.  The Bharatmala Pariyojana has been launched in October 2017 for development of an 
aggregate le ngth of about 34,800 km (including 10,000 km residual NHDP stretches) of economic 
corridors, inter -corridor and feeder roads, border and international connectivity roads, coastal and 
port connectivity roads, and expressways .25 
8.6.  On the Railways front, for ca pacity enhancement and decongestion of high -density network, 
dedicated Freight Corridors of 3300 km (Western & Eastern Dedicated Freight Corridors) are under 
advance stage of completion. For increasing the ease of doing business and attracting new traffic,  
Business Development Units (BDUs) have been constituted, and a universal Freight and Parcel 
Helpline has been started. In addition, Railways is also giving priority to freight traffic which has 
resulted in doubling the speed of freight trains and reducing  the delivery time of goods. As a result 
of all these initiatives, Indian Railways achieved a significant milestone of pulling freight traffic ahead 
of the last year's level by 15.35% in September 2020 as compared to September 2019, in spite of 
COVID -19 as sociated challenges.  
8.7.  In the area of High -Speed Passenger Transport, a project of 508 km length Mumbai -
Ahmedabad High Speed Rail is already under execution. Indian Railways has recently taken a novel 
initiative towards introduction of private train operators in running of passe nger trains on premium 
routes. Under this initiative, 150 trains are planned to be run by private operators who will also be 
permitted to bring their own rolling stock for enabling better on -board services and amenities to the 
passengers.  
8.3  The COVID -19 Challenge  
8.8.  The COVID -19 pandemic is a concern for all, especially for the resource deficient developing 
countries, as such a widespread pandemic would have far reaching impact on economic activity and 
trade in these countries. Supply -chain contagion is expected  to amplify the direct supply shocks as 
manufacturing sectors in less -affected nations find it harder and/or more expensive to acquire the 
necessary imported industrial inputs from the hard -hit nations, and subsequently from each other. 
Demand disturbances  due to macroeconomic drops in aggregate demand (i.e. recessions) and wait -
and-see purchase delays by consumers and investment delays by firms, are also expected.  
8.9.  Taking into consideration the fact that COVID -19 is a highly infectious disease and any mass 
movement of people could have spread the disease at a rapid pace amongst people in all parts of 
the country, India imposed a strict lockdown from 25th March 2020. Though the subsequent period 
was of economic standstill, India successfully blunted the aggre ssive spread of COVID.  Restrictions 
on various activities have been eased since May 2020 as Government of India made a courageous 
choice of supporting livelihoods that in turn made the containment of the pandemic more 
challenging. As restrictions were furt her eased, the country entered the unlock phase in June 2020.  
8.10.   India’s merchandise exports in June 2020 were US D 21.9 billion, as compared to US D 25.0 
billion in June 2019, exhibiting a negative growth of ( -) 12.5%. The decline in exports has been 
mainly du e to the global slowdown, which got aggravated due to the current COVID -19 crisis. The 
latter resulted in large scale disruptions in supply chains and demand, resulting in cancellation of 
orders. Except for essential commodities like food and medicines, mo st of the other commodities 
registered negative growth in June 2020. The commodity/groups registering positive growth in June 
2020, included Iron Ore (63.1%), Oil seeds (50.5%), Rice (32.7%), Spices (22.9%), Organic and 
Inorganic Chemicals (19.1%), Fruits and Vegetables (11.0%), Drugs & Pharmaceuticals (9.9%), etc. 
In contrast to the steep decline in certain sectors, India’s IT/ITeS industry demonstrated remarkable 
resilience in responding to the pandemic, ensuring busin ess continuity for all global clients. Despite 
the COVID -19 induced lockdown, this sector adapted well with 95% of its employees working from 
home, thereby fulfilling its global commitments. The IT/ITeS industry’s efforts were complemented 
by an enabling e cosystem of robust infrastructure and regulatory changes, which aided the industry’s 
adaptation to this crisis. As a result, the computer services exports of India in April - June quarter 
 
25 https://morth.nic.in/bharatmala -phase -i. WT/TPR/G/ 403 • India  
 
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  of 2020 fell marginally by 0.8% over the corresponding period in 201 9. Performance of the IT/ITeS 
sector reinforced India’s position as a valued and trusted partner across the globe.  
8.11.   With the easing of lockdown since June 2020, the country’s merchandise exports have also 
started showing signs of recovery. In the month of J uly 2020, exports of the value US D 23.64 billion 
were achieved, which is almost 90% of the value in the corresponding period last year.  
8.4  Government's response to COVID -19 
8.12.   As the economy comes out of the lockdown, the policy focus by the Government has shift ed 
to stimulating various sectors of the economy, while preserving macro -economic stability. The 
Government began these measures through a well laid out strategy wherein it imposed lockdown to 
allow states to ramp -up their health and testing infrastructure  while implementing “Pradhan Mantri 
Garib Kalyan Yojana” and emergency package for health workers.  
8.13.   The next step was to convert the pandemic situation into an opportunity by furthering 
domestic manufacturing to help us cope better with the prevailing situa tion as well as to abide by 
our strong commitment towards mutual cooperation with the world. India thus took major strides in 
enhancing production capacities of essential drugs and other materials to support the healthcare 
systems around the world. The PPE  production capacity was thus revamped to half million kits every 
day from virtually nil earlier and India unconditionally facilitated assistance requests of many 
countries for exports of critical drugs and medicines. As a result, India supplied around 45 tons and 
400 million tablets of hydroxychloroquine to around 114 countries globally. Similarly, paracetamol 
supplies of around 96 million tablets, 0.4 million of suspension IP, 0.8 million bottles and 270 MT, in 
various other forms were made to 24 countrie s, along with supplies of other essential materials to 
about 57 countries.  These measures reinforced our credibility as a reliable, trustworthy and 
empathetic partner working for the common good.  
8.14.   Simultaneously, in a big push to restart the economy that wa s under standstill in April 2020, 
the Government announced a ₹ 20 trillion package on 12th May 2020, which combine d the 
Government's recent announcements on supporting key sectors as well as measures rolled out by 
the Reserve Bank of India.  
8.15.   Food security a nd agriculture -related initiatives  
• An important measure taken by the government to counter the economic impact of the 
Covid -19 pandemic is the  Pradhan Mantri Garib Kalyan Yojana . Under this programme, 
approximately two -thirds of the Indian population was provided 5 kg of wheat/rice and 1 kg 
of pulses per family.  
• Initially started for a period of three months, the programme was subsequently extended till 
November 2020.  
• This highlights the important role played by public stockholding programm es in mitigating 
the adverse impact on food security for the vulnerable population, especially, amidst the 
COVID -19 pandemic.  
8.16.   Trade Facilitation and Customs -related initiatives26 
• In order to handle disruptions in supply of raw materials/inputs to industrial units, a 
facility of 24X7 customs clearance was provided at all designated sea ports and airports 
across the country till the end of June 2020 (except for designated sea ports/air ports 
already under 24X7 operation, which wou ld continue to function so even after June 
2020).  
• The Basic Customs Duty and Health Cess on Artificial respiration or other therapeutic 
respiration apparatus (Ventilators); Face masks and surgical Masks; Personal protection 
 
26 https://www.cbic.gov.in/htdocs -cbec/customs/covid -19/covid -19-measures -new. WT/TPR/G/ 403 • India  
 
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  equipment (PPE); COVID -19 testin g kits; and inputs for the manufacture of these items 
were exempted till 30th September 2020.  
• Customs authorities facilitated eligible imports under preferences subject to the 
subsequent production of the certification of origin (CoO).  
• All major ports were advised not to levy penalties, demurrage, charges, fee, rental on 
any port user (traders, Shipping Lines, concessionaires, licensees etc.) for any delay in 
berthing, loading/unloading operations or evacuation/arrival of cargo caused by reasons 
attribu table to the supply chain disruptions owing to the lockdown measures.  
• To make import clearance process more contactless, e -delivery of PDF -based Gatepass 
and Out of Charge copy of Bill of Entry to custom brokers/importers, has been launched 
across India fr om 15th April 2020.  
• The time period for realization and repatriation of export proceeds for exports made up 
to or on 31st July 2020, has been extended to 15 months from the date of export.  
• To ease the burden of compliance on the AEOs, the AEO certificates that were expiring 
between 1st March 2020 and 31st May 2020 have been extended to 30th June 2020.  
• A dedicated single window COVID -19 helpdesk for EXIM trade has been created by the 
Indian Customs to facilitate quick resolution of issue(s) faced by importer /exporter.  
8.17.   Measures taken by the Reserve Bank of India (RBI)27 
• Significant reduction in policy rates (the repo rate by 75 basis points to 4.4% and further 
to 4% in May) and injected a huge amount of liquidity of approximately 3.9% of GDP to 
enhance credit flow in the economy.  
• Special refinance facilities for a total amount of ₹ 750 billion to NABARD, SIDBI, NHB 
and EXIM Bank to enable them to meet sectoral credit needs.  
• An option to grant a moratorium/deferment of six months between 1st March 2020 and 
31st August 2020 for all term loans (including agricultural term loans, retail and crop 
loans).  
9  CONCLUSIONS AND LOOKING AHEAD  
9.1.  Overall, despite the challenges confronting the Indian economy, global business and trade 
continue to repose confidence in the country, given the structural reforms initiated and handsome 
returns the economy has brought to fruition in the past. Infrastructure upgradation coupled with 
numerous social measures and skill upgradation programs are expected to have a positive spill over  
effect on the targeted growth trajectory of the country.  
9.2.  In the multilateral arena, India believes that respecting trade rules of the WTO is the only 
solution to addressing the unfolding crisis and will continue to play a positive role to establish a fair  
and equitable multilateral trading system. Simultaneously, it will also engage in concluding new 
trade and economic partnership agreements with the partner countries.  
9.3.  The Trade Policy in India would continue to endeavour to build synergies with ongoing 
initiatives, with a strong focus on diversification of exports, and with an aim to properly anchor the 
elements of foreign trade within a composite approach to economic development.  
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27 https://www.rb i.org.in/scripts/bs_viewcontent.aspx?Id=3894 .