WTO to review India's trade policy next year

The trade policy review of India by the World Trade Organisation secretariat is scheduled from May 12-14 next year.

Preparations for the review have been started in right earnest by the department of commerce, which has sought data from various related ministries.

"It is a comprehensive and detailed review of every facet of Indian trade policy. As part of the preparations, WTO has requisitioned from us a voluminous amount of information," officials told Business Standard.

"We sifted through the long list of information sought by the WTO secretariat and asked the key ministries and departments to submit the details last month itself," they said.

This is not the first India review "" three have been held till now. These reviews are held every three-four years. During the course of this year, a number of reviews have been conducted including for China and the US.

Trade policy reviews are an exercise, mandated in WTO agreements, in which member countries' trade and related policies are examined and evaluated at regular intervals. Significant developments that may have an impact on the global trading system are also monitored.

For each review, two documents are prepared "" a policy statement by the government of the member under review and a detailed report written independently by the WTO secretariat.

These two documents are then discussed by the WTO's full membership in the Trade policy review body. These documents and proceedings of the body's meetings are published shortly afterwards.

The third trade policy review of India report, drawn up by the WTO Secretariat in May 2002, had observed that while the process of dismantling the country's complex system of trade and domestic controls had already yielded considerable results, there was need for domestic structural reforms to be deepened and completed. The report also mentioned that infrastructure remained a major constraint for economic activity in the country.

"In particular, difficult decisions are required to redress the fiscal imbalance, by reducing subsidies, completing the process of tariff and tax reform and stepping-up privatisation of state-owned enterprises. A reduced fiscal deficit is also likely to improve the investment climate and free resources for private and public investment, particularly in infrastructure services, which have become a major bottleneck to economic growth," the report had said.