Consequences of WTO for India – Gains & Challenges

India’s membership of WTO has brought significant opportunities and some serious concerns.

1. Gains / Positive Consequences

1. Greater Access to World Markets

   • Reduction in tariffs and quotas globally created new markets for Indian goods and services.

2. Growth of Services Exports

   • Under GATS framework, India became a major exporter of IT, BPO and other services.

3. More Predictable Trading Environment

   • Bound tariffs and multilateral rules provide stability and dispute mechanisms.

4. Encouragement to Domestic Reforms

   • WTO commitments supported tariff rationalisation, export promotion and competition.

2. Challenges / Negative Consequences

1. Pressure on Agriculture

   • Exposure to global price fluctuations; worries about import competition and subsidy disciplines under AoA.

2. Competition for Small‑Scale Industries

   • Cheaper imports and entry of MNCs affect artisans and small manufacturers.

3. Policy Space Constraints

   • Some WTO rules limit use of certain subsidies or trade restrictions, narrowing choices for development policy.

4. Implementation and Adjustment Costs

   • Upgrading standards, institutions and legal systems to comply with WTO rules is costly and complex.

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3. Balanced Evaluation / Exam Answer Style

When writing in exams:

• Start with brief meaning of WTO.
• Present 3–4 clear gains with examples.
• Present 3–4 concerns (agriculture, MSMEs, policy space).
• Conclude that benefits can be maximised and costs reduced through appropriate domestic policies and negotiation strategy.

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4. Quick Revision Points

• WTO has opened markets and boosted services exports, but raised concerns over agriculture, small industry and policy autonomy.
• India needs strategic engagement: support open, rules‑based trade while safeguarding food security, livelihoods and development goals.

5. Quiz Time 🎯

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