WTO’s Impact on Indian Trade Policy – Post-1995 Reforms

Joining WTO in 1995 significantly influenced India’s trade policy.

1. Pre-WTO Trade Regime (Brief)

• High tariff and non‑tariff barriers; import licensing; quantitative restrictions.
• Policy of import substitution – protect domestic industries behind high walls.

2. Key Changes in Trade Policy after WTO

1. Tariff Reduction and Rationalisation

   • Gradual reduction in customs duties on many products.
   • Movement towards moderate, uniform tariff structure.

2. Removal of Quantitative Restrictions (QRs)

   • Many import licences and QRs phased out to comply with WTO rules.

3. Shift from Import Substitution to Export Promotion

   • Greater focus on export competitiveness, special economic zones (SEZs), export incentives.

4. Greater Integration with World Markets

   • Participation in global value chains; increased share in world trade (especially in services).

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3. Sectoral Impact – Overview

• Agriculture – subject to AoA rules; concerns about food security and imports.
• Textiles – MFA phase‑out created new opportunities with competition.
• Services – big gains in IT and BPO exports under GATS framework.

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4. Quick Revision Points

• WTO pushed India towards tariff reduction, QR removal and export orientation.
• Impact is sector‑specific: agriculture, textiles, services each have gains and concerns.
• Overall, India has become more integrated into world economy post‑1995.

5. Quiz Time 🎯

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