Explain the effects of W.T.O. on Indian Economy.
Answers
India is one of the founding member of WTO . There has been several benefits for India along with few concerns by virtue of its participation in the multilateral trading system within WTO.
Here are the effects :-
1. WTO has helped India to improve its export competitiveness.
2. Lower tariff barriers and market access has helped India to integrate and participate in the global economy in a more efficient manner.
3. Transfer & Exchange of Technology ,ideas etc. has been of tremendous help for India in pursuit of its growth and development.
4. Having market access has helped in reduction of cost and time which would have otherwise required for bilateral trade negotiations.
5. A well defined and structured dispute settlement mechanism also makes it easier to settle the trade disputes.
However, at the same time WTO also poses some serious challenges to the Indian agriculture. Issue of permanent "Peace Clause" and formula to calculate food subsidy cap of 10% is yet to get clarified. Poor farmers are bound to be at the receiving end who might be deprived of the subsidies which they receive from the government in the form of Minimum Support Price (MSP). Since India has recently ratified the Trade Facilitation Agreement now they can't deny market access to the other countries. It might prove detrimental to the farmers to a certain extent because once the foreign players enters the domestic market completely it would be a herculean task for the Indian farmers to compete with them owing to their lack of competence in terms of production, quality,technology, manufacturing cost etc.
Effect of WTO on Indian economy
Explanation:
WTO or World trade organization is an international organization that deals with rules and regulation of international trade. it helps it's member country including INDIA to conduct it's trade freely. it has the following effect on Indian economy.
- It helped developing countries like India in increasing it's export of merchandise by reducing tariff and non tariff barriers.
- it also helped India in increasing export of services and earn huge foreign exchange.
- WTO also facilitated increased export of agricultural goods from India.
- Removal of restriction on FDI helped INdia in getting huge foreign investment.
- Apart from it India's export of textile and clothing also increased.
Learn more:
WTO and it's functions
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