All about WTO's Seventh Trade Policy Review (TPR) of India
Why in News?
India's seventh trade policy review was recently conducted at the World Trade Organization in Geneva.
What is a Trade Policy Review?
- The Trade Policy Review is a mechanism that is under WTO's monitoring function.
- In this member countries, trade and policies related to it are examined by the World Trade Organization.
- They also aim towards better adherence to the rules set by WTO.
- All WTO Members are subject to review under the Trade Policy Review Mechanism.
- Previously India's Trade Policy Review was conducted in 2015.
Seventh Trade Policy Review -
Benefits for India:
- WTO appreciated India on the move of introducing of Goods & Services Tax in 2016. India was also praised for its efforts to implement WTO’s Trade Facilitation Agreement.
- India played a major role in the global economy by furthering its “Ease of Doing Business” policies which helped in bringing a lot of business to the country. This was appreciated by the WTO in its report too.
- India’s improved ranking in the indicator of ‘Trading across Borders’ was a plus point for the country.
- Trade Facilitation Agreement (TFA) set up by India helps in speeding up customs departments procedures. This in turn makes trade easier, faster, and cheaper.
- India liberalised its Foreign Direct Investment, FDI regime which has been a point of appreciation across the world and was done by WTO too.
- Also, India’s National Intellectual Property Rights Policy, 2016 was called an added advantage in the report.
Major Challenges for India as per WTO
- As per WTO, India even now relies on trade policy instruments like various kinds of tariffs, export taxes, minimum import prices, MIP, restrictions on import or export, and licensing. This means its trade policies have remained very much the same from the past 5 years.
- These are used to manage domestic demand and supply requirements which may change from time to time posing dangers for the traders.
- In short, as the tariffs are unstable, the trade becomes unstable too.
Trade Policy Review Mechanism- Background
- The Trade Policy Review Mechanism was decided to be conducted after the Uruguay Round.
- It is considered to be the main transparency instrument of WTO
- It is considered to be the safest and the most transparent tool for the evaluation of trade policies and practices of individual members of WTO.
- It also aims to evaluate members trade policies on the global ground.
- This also provides a scan on the member’s trade policies hence maintaining a check on the global economy.
- The review takes place every four years for developing countries while every two years for the developed nations.
This year India also requested WTO for a permanent solution to Public Stock Holding, PSH regarding food security. PSH is a policy tool used by the governments to procure, stock, store and distribute food to the population in the time of need. Currently, PDS programmes of all member countries that are in the developing stage, are kept under the trade-distorting Amber Box by WTO. India demands a complete exemption from the subsidy reduction commitments as its population needs it. India must work for this and keep on pressing its demands on the global platform.