'Farm sector in India less shielded'

Despite high bound tariffs for agricultural products, the effective level of protection in India is lower than that of some developed countries, including Japan and the European Union.

According to an exercise carried out by Unctad, average protection in agriculture in India is around 40.8 per cent, against 93.7 per cent in Japan and 58.6 per cent in the European Union.

The US (31.4 per cent) and Canada (32.7 per cent) fared marginally better, Unctad India's Co-ordinator Veena Jha said at a seminar on 'Development in Open Economies'.

"India had high bound tariffs, but the applied tariffs were low. Yet, imports were small except in items like cotton and oilseeds," she said. While tariff peaks and tariff escalation in India were very limited, the EU and US applied these on several sectors that were of interest to India, it was pointed out.

Speaking at the seminar, SN Menon, special secretary in the commerce ministry, said the current round of multilateral trade talks needed to address the continuing distortions in agriculture and the protectionist barriers in certain industrial products where developing countries had a competitive advantage.

"Multiple barriers in respect of textile and clothing and leather items in developed countries are a case in point. It is now widely acknowledged that the extent of liberalisation achieved in the Uruguay Round was very small, particularly in sectors and products of specific interest to developing countries," Menon said.

The importance of specific areas under negotiation for the wider membership of the WTO would need to be judged by their expectations of how much could be achieved in and the magnitude of the existing economic distortions, Menon said, adding that concerted effort was needed to uphold the development mandate of the Doha Declaration.

The Unctad study also pointed out that market access issues like anti-dumping and subsidies would be very important, especially for steel and textiles.

The study said post-Multi Fibre Agreement, 310,000 people would be lifted out of poverty annually for the next seven years, but affirmative action would be required to sustain India's advantage in labour costs.

On TRIPs, Jha said the transition period had been very important for India and had been used to move to basic research and to boost its bulk drug production.

India would have the opportunity to provide drugs for public health but its over 8,000 small units would need funds to be able to do so.